H.J. Heinz Company’s actual condensed balance sheet data for April 27, 2011, follow ($ in millions):

The following summarizes a few transactions during May 2011 ($ in millions):
a. Ketchup carried in inventory at a cost of $4 was sold for cash of $3 and on open account of $8, for a grand total of $11.
b. Acquired inventory on account, $6.
c. Collected receivables, $5.
d. On May 2, used $12 cash to prepay some rent and insurance for 12 months. Heinz classifies prepaid expenses as Other Assets.
e. Payments on accounts payable (for inventories), $4.
f. Paid selling and administrative expenses in cash, $1.
g. Prepaid expenses of $1 for rent and insurance expired in May.
h. Depreciation expense of $2 was recognized for May.

1. Prepare an analysis of Heinz’s transactions, employing the balance sheet equation approach demonstrated in Exhibit. Show all amounts in millions.
2. Prepare a statement of earnings for the month ended May 31 and a balance sheet as of
May 31. Ignore income taxes.

  • CreatedFebruary 20, 2015
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