University of Texas at Arlington Characteristics of Liabilities Worksheet

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Economics

University of Texas at Arlington

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CASE 3-2 Analyzing and Interpreting Liabilities Refer to the annual report of Campbell Soup Company in Appendix A. Campbell Soup Required: a. Identify Campbell Soup's major categories of liabilities. Identify which of these liabilities require recognition of interest expense. b. Reconcile activity in the long-term borrowing account for Year 11. c. Describe the composition of Campbell Soup's long-term liabilities account using its note 19. CASE 3-3 Analyzing and Interpreting Equity Refer to the annual report of Campbell Soup Company in Appendix A. Page 220 Campbell Soup Required: a. Determine the book value per share of Campbell Soup's common stock for Year 11. b. Identify the par value of Campbell Soup's common shares. Determine the number of common shares authorized, issued, and outstanding at the end of Year 11. c. Determine how many common shares Campbell Soup repurchased as treasury stock for Year 11. Determine the price at which Campbell Soup repurchased the shares. CHECK (c) Year 11 repurchase price, $51.72CASE 3-2 Analyzing and Interpreting Liabilities Refer to the annual report of Campbell Soup Company in Appendix A. Campbell Soup Required: a. Identify Campbell Soup's major categories of liabilities. Identify which of these liabilities require recognition of interest expense. b. Reconcile activity in the long-term borrowing account for Year 11. c. Describe the composition of Campbell Soup's long-term liabilities account using its note 19. CASE 3-3 Analyzing and Interpreting Equity Refer to the annual report of Campbell Soup Company in Appendix A. Page 220 Campbell Soup Required: a. Determine the book value per share of Campbell Soup's common stock for Year 11. b. Identify the par value of Campbell Soup's common shares. Determine the number of common shares authorized, issued, and outstanding at the end of Year 11. c. Determine how many common shares Campbell Soup repurchased as treasury stock for Year 11. Determine the price at which Campbell Soup repurchased the shares. CHECK (c) Year 11 repurchase price, $51.72Supplemental Schedule of Sales and Earnings (million dollars) 1 Contributions by division Campbell North America Campbell U.S.A. Campbell Canada Campbell Biscuit and Bakery Pepperidge Farm International Biscuit Campbell International Interdivision Total sales Total operating earnings Unallocated corporate expenses Not earnings Campbell Soup Sales Not earnings per share Year 11 $3,911.8 352.0 4,263.8 569.0 219.4 788.4 1,222.9 (71.0) Interest, net Foreign currency translation adjustments Taxes on earnings $6,204.1 Earnings $632.7 35.3 668.0 73.6 17.6 91.2 39.4 798.6 (41.1) (90.2) .1 (265.9) $401.5 $3.16 Sales Year 10 $3,932.7 384.0 4,316.7 582.0 195.3 777.3 1,189.8 (78.0) $6,205.8 Earnings $370.8 25.6 396.4 57.0 8.9 65.9 (168.6) 293.7 (16.5) (94.0) (3.8) (175.0) $4.4 $.03 Sales $3,666.9 313.4 3,980.3 548.4 178.0 726.4 1,030.3 (64.9) $5,672.1 ngs $242.3 23.8 266.1 53.6 11.7 65.3 (117.8) 213.6 (31.3) (55.8) (20.0) (93.4) $13.1 $.10 Page A4731 32 33 35 CONSOLIDATED BALANCE SHEETS Plant assets, not of depreciation (Note 16) Intangible assets, net of amortization (Note 17) 39 Other assets (Note 18) Total assets 48 49 50 (million dollars) Current Liabilities 40 Notes payable (Note 19) 41 43 51 52 53 Current Assets Cash and cash equivalents (Note 12) Other temporary investments, at cost which approximates market Accounts receivable (Note 13) Inventories (Note 14) Prepaid expenses (Note 15) Total current assets 55 46 Long-term debt (Note 19) Other liabilities, principally deferred income taxes (Note 21) Shareowners' Equity (Note 22) Preferred stock; authorized 40,000,000 shares; none issued Payable to suppliers and others Accrued liabilities (Note 20) Dividend payable Accrued income taxes Total current liabilities Capital stock, $.15 par value; authorized 140,000,000 shares; issued 135,622,676 shares Capital surplus July 28, Year 11 $178.9 12.8 527.4 706.7 92.7 1,518.5 1,790.4 435.5 404.6 $4,149.0 $282.2 482.4 408.7 37.0 67.7 1,278.0 772.6 305.0 20.3 107.3 Earnings retained in the business 1,912.6 Capital stock in treasury, 8,618,911 shares in Year 11 and 6,353,697 shares in Year 10, at cost (270.4) Cumulative translation adjustments (Note 4) 23.6 Total shareowners' equity 1,793.4 Total liabilities and shareowners' equity $4,149.0 July 29, Year 10 $80.7 22.5 624.5 819.8 118.0 1,665.5 1,717.7 383.4 349.0 $4,115.6 $202.3 525.2 491.9 32.3 46.4 1,298.1 805.8 319.9 20.3 61.9 1,653.3 (107.2) 63.5 1,691.8 $4,115.6
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Case 3-2
a. Identify Campbell Soup’s major categories of liabilities. Identify which of these liabilities
require recognition of interest expense.
Campbell Soup’s liabilities are divided into current and non-current liabilities:
1. Current liabilities include:






Notes payable which generally carry an interest expense although the interest expense
is not included in this account.
Accounts payable which includes payments to suppliers and other...


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