Question

10) For this question you must use the excerpts from the financial statements of Campbell Soup Company, found in Appendix 2. a. At July 29, 2018, Campbell had $785 million of accounts receivable, yet for the year ended July 29, 2018, Campbell's net sales (i.e. total revenues) on its Income Statement were $8,685 million. Why are these two numbers different? b. On Campbell's Balance Sheet there is an account called 'accrued liabilities'. Is this liability current or long term? What are accrued liabilities? c. Does Campbell's have retained earnings? If so, what do they call this account? Did this account increase or decrease from the previous year?

Answer 1

Campbell

Answer a

Total revenues means value of total services provided or total goods sold during the period whether realized in cash or not.

Account receivable means amount receivable from customer against services provided or goods sold.

This is why both the figures are different for Campbell as both have different meaning.

Answer b

Accrued liabilities shown in the Balance sheet of Campbell are current liabilities because they are grouped in that head.

Accrued liabilities means amount payable to vendors against service or benefits received.

Answer c

Yes Campbell does have retained Earnings. They call it earnings retained in business. Last year this account has balance $ 2,385 millions and this year it has balance $ 2,224 million so this account has decreased from last year.