Consider the Income Statement and Note 18 (Supplemental information) for General Mills below and answer the following
Question:
Consider the Income Statement and Note 18 (Supplemental information) for General Mills below and answer the following questions. Assume revenue is presented gross of bad debt expense.
a. Assume that the Company charged $16 million as bad debt expense in 2020. Compute the number of bad debts written off in 2020.
b. Compute the amount of cash collected from customers during the year ended May 31, 2020.
c. What cost flow assumption(s) for inventories does General Mills use?
d. Suppose that General Mills had in all periods used FIFO as their cost flow assumption for all their inventories. What would have been General Mills’ book value of inventories at the end of the fiscal year 2020 under this alternative cost flow assumption?
e. What is the amount of inventory purchases in the fiscal year 2020?
f. If General Mills had used FIFO as a cost flow assumption for all of their inventories, recalculate the value of COGS on a FIFO basis in the fiscal year 2020.
Governmental and Nonprofit Accounting
ISBN: 978-0132751261
10th edition
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi