29 Jun Question Part A 1. The following balance sheet in
Question
Part A
1. The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc. for the 2008 fiscal year. (Certain amount have been replaced with question marks to test your understanding of balance sheets.) In addition, you’re provided with The following information from an analysis of Marriott’s financial position at the same date:
Current ratio = 1.3296486
Acid-test ratio = 0.407422
Debt-to-equity ratio = 5.4514493
Compute the missing amounts (rounded to the nearest $ in millions) in the Marriott balance sheet.
Assets
Current assets
Cash and equivalents $134
Accounts and notes receivable ?
Inventory ?
Other 355
Total current assets ?
Property and equipment, net $1,443)
Intangible assets, net ?)
Investments 346)
Notes and other receivables, net 988)
Other 1,173)
Total non-current assets ?
Total assets ?
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable $704
Accrued payroll and benefits 633
Other payables and accruals 1,196
Total current liabilities 2,533
Long-term debt ?)
Other long-term liabilities 2,015)
Total long-term liabilities ?
Total liabilities ?
Shareholders’ equity
Class A common stock 5)
Additional paid-in capital 3,590)
Retained earnings 3,565)
Treasury stock and other (5,780)
Total shareholders’ equity 1,380
Total liabilities and shareholders’ equity $8,903
2. The following information is provided in the 2011 annual report to shareholders of paris-perfume.com:
December 31, 2011 December 31, 2010
Accounts receivable ??? $100 million
Inventory $70 million $30 million
Other assets ??? $170 million
Total assets ??? $300 million
Total liabilities ??? $100 million
Total stockholders’ equity ??? $200 million
For the year ended Dec. 31, 2011
Net sales ???
Cost of goods sold ???
Net income $40 million
Return on assets 10%
Receivables turnover 8.0
Inventory turnover 12.0
Asset turnover 2.5
Return on stockholders’ equity 20%
Profit margin on sales 4%
Required: Compute the missing amount in the paris-perfume.com financial statement information, indicated by ??? in the table above.
3. Shown below is activity for one of the products of Denver Office Equipment:
January 1 balance, 500 units @ $55 $27,500
Purchases
January 10 500 units @ $60
January 20 1,000 units @ $63
Sales:
January 12 800 units
January 28 750 units
a. Compute the ending inventory and cost of goods sold assuming Denver uses FIFO.
b. Compute the ending inventory and cost of goods sold assuming Denver uses LIFO and a perpetual inventory system.
c. Compute the ending inventory and cost of goods sold assuming Denver uses average cost and a periodic inventory system.
d. Compute the ending inventory and cost of goods sold assuming Denver uses average cost and a perpetual inventory system.
e. Compute the ending inventory and cost of goods sold assuming Denver uses LIFO and a periodic inventory system.
Part B
1. The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.:
Net sales $10,711
Total assets 4,363
End of year balance in cash 1,022
Total stockholders’ equity 431
Gross profit (Sales – Cost of Sales) 2,456
Net increase in cash for the year 9
Operating expenses 2,067
Net operating cash flow 702
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