Question

Refer to Exhibit 1.9, which contains balance sheet information from the financial report of Palmer Coldgate, a U.S. consumer products manufacturer.
This firm reports all amounts in millions of U.S. dollars ($). Answer the following questions that pertain to the information in this exhibit.
a. What is the firm’s largest asset, and what is the asset’s carrying value on the balance sheet?
b. What is the total amount of the firm’s noncurrent assets?
c. What is the firm’s largest liability, and what is the liability’s carrying value on the balance sheet?
d. By how much do the firm’s current assets differ from its current liabilities?
e. Has the firm been profitable since its inception? How do you know?
f. What fraction of its assets does the firm finance with liabilities?
g. Verify that the firm’s assets equal the sum of liabilities plus shareholders’ equity.

Exhibit 1.9
Current Assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 428.7
Receivables (net of allowances of $50.6 and $46.4, respectively) . . . 1,680.7
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,171.0
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338.1
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,618.5
Property, plant, and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,015.2
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,272.0
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844.8
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,112.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes and loans payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 155.9
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.1
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,066.8
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262.7
Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,539.2
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,162.7
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,221.9
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264.1
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,177.1
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,825.8
Commitments and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . —
Shareholders’ Equity
Preference stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197.5
Common stock, $1 par value (1,000,000,000 shares authorized,
732,853,180 shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732.9
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,517.7
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,627.5
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . (1,666.8)
.......... 11,408.8
Unearned compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (218.9)
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,903.7)
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,286.2
Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . $10,112.0




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  • CreatedMarch 04, 2014
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