Review the consolidated balance sheets and the related disclosures and respond to the following questions. Equity: Explain
Question:
Review the consolidated balance sheets and the related disclosures and respond to the following questions.
Equity:
- Explain why the amount reported for Treasury Stock as of June 30, 2019, is subtracted from stockholders’ equity.
- The company is authorized to issue 200,000,000 shares of Non-Voting Class B preferred stock. As of June 30, 2019, what is the outstanding amount received from the issuance of the Non-Voting Class B preferred stock?
- The company has issued Convertible Class A preferred stock. Was any of the Convertible Class A stock converted during the fiscal year ended June 30, 2019? If so, what was it converted into?
- Explain why the balance in “Common Stock, stated value $1 per share” is so small in relation to the balance in the “Additional paid-in capital” account.
- What percentage of the company’s total assets was financed through retained earnings as of June 30, 2019?
Consolidated Balance Sheets
Amounts in millions; As of June 30 | 2019 | 2018 | |||||
Assets | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 4,239 | $ | 2,569 | |||
Available-for-sale investment securities | 6,048 | 9,281 | |||||
Accounts receivable | 4,951 | 4,686 | |||||
INVENTORIES | |||||||
Materials and supplies | 1,289 | 1,335 | |||||
Work in process | 612 | 588 | |||||
Finished goods | 3,116 | 2,815 | |||||
Total inventories | 5,017 | 4,738 | |||||
Prepaid expenses and other current assets | 2,218 | 2,046 | |||||
TOTAL CURRENT ASSETS | 22,473 | 23,320 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 21,271 | 20,600 | |||||
GOODWILL | 40,273 | 45,175 | |||||
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET | 24,215 | 23,902 | |||||
OTHER NONCURRENT ASSETS | 6,863 | 5,313 | |||||
TOTAL ASSETS | $ | 115,095 | $ | 118,310 | |||
Liabilities and Shareholders' Equity | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 11,260 | $ | 10,344 | |||
Accrued and other liabilities | 9,054 | 7,470 | |||||
Debt due within one year | 9,697 | 10,423 | |||||
TOTAL CURRENT LIABILITIES | 30,011 | 28,237 | |||||
LONG-TERM DEBT | 20,395 | 20,863 | |||||
DEFERRED INCOME TAXES | 6,899 | 6,163 | |||||
OTHER NONCURRENT LIABILITIES | 10,211 | 10,164 | |||||
TOTAL LIABILITIES | 67,516 | 65,427 | |||||
SHAREHOLDERS' EQUITY | |||||||
Convertible Class A preferred stock, stated value $1 per share (600 shares authorized) | 928 | 967 | |||||
Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized) | — | — | |||||
Common stock, stated value $1 per share (10,000 shares authorized; shares issued: 2019 - 4,009.2, 2018 - 4,009.2) | 4,009 | 4,009 | |||||
Additional paid-in capital | 63,827 | 63,846 | |||||
Reserve for ESOP debt retirement | (1,146 | ) | (1,204 | ) | |||
Accumulated other comprehensive income/(loss) | (14,936 | ) | (14,749 | ) | |||
Treasury stock, at cost (shares held: 2019 - 1,504.5, 2018 -1,511.2) | (100,406 | ) | (99,217 | ) | |||
Retained earnings | 94,918 | 98,641 | |||||
Noncontrolling interest | 385 | 590 | |||||
TOTAL SHAREHOLDERS' EQUITY | 47,579 | 52,883 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 115,095 | $ | 118,310 |
Corporate Financial Accounting
ISBN: 978-1305653535
14th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac