Reconciling Changes in Balance Sheet Accounts The following table presents selected items from the 2014 and...
Reconciling Changes in Balance Sheet Accounts
The following table presents selected items from the 2014 and 2013 balance sheets and 2014 income statement of Walgreen Company.
| WALGREEN CO. AND SUBSIDIARIES ($ millions) | |||||
|---|---|---|---|---|---|
| Selected Balance Sheet Data | Selected Income Statement Data | ||||
| 2014 | 2013 | 2014 | |||
| Inventories | $16,088 | $14,756 | Cost of Merchandise Sold | $103,384 | |
| Property and Equipment, Less | Depreciation Expense | 1,618 | |||
| Accumulated Depreciation | 23,052 | 22,368 | |||
| Trade Accounts Payable | 9,620 | 9,170 | Net Earnings | 5,428 | |
| Retained Earnings | 37,754 | 33,696 | |||
| a. | Compute the cash paid for merchandise inventories in 2014. Assume that trade accounts payable is only for merchandise purchases. | |
| $Answer million | ||
| b. | Compute the net cost of property acquired in 2014. | |
| $Answer million | ||
| c. | Compute the cash dividends paid in 2014. | |
| $Answer million |
Homework Answers
Answers:
Working:
(all amounts are in million)
Answer (a):
Purchases = Ending inventory + Cost of goods sold - Beginning inventory = 16088 + 103384 - 14756 = $104,716
Cash paid for merchandise inventories in 2014 = Purchase + Beginning Trade Accounts - Ending Trade Accounts Payable
= 104716 + 9170 - 9620
= $104,266 million
Answer (b):
Net cost of property acquired in 2014 = Ending balance of Net Property and Equipment - (Beginning balance of Net Property and Equipment - Depreciation expense of 2014
= 23,052 - (22,368 - 1,618)
= $2,302 million
Answer (c):
cash dividends paid in 2014 = Beginning balance of Retained earnings + Net earnings - Ending balance of Retained earnings
= 33696 + 5428 - 37754
=$1,370 million
Add Answer to:
Reconciling Changes in Balance Sheet
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