Please consider the Income Statement and Note 17 (Supplemental information) for General Mills below and answer the following questions. For the purpose of this problem, assume that inventory values determined using the average cost method are equivalent to FIFO values. Also assume that revenue is presented net of bad debt expense. ssume that the Company charged $7 million as bad debt expense. Compute the amount of bad debts written off in 2010.
Compute the amount of cash collected from customers during the year ended May 30th, 2010.
What cost flow assumption(s) for inventories does General Mills use?
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 fiscal year 2010 under this alternative cost flow assumption?
What is the amount of inventory purchases in fiscal year 2010?
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2010 2009 2008
Net sales $14,796.5 $14,691.3 $13,652.1
Cost of sales 8,922.9 9,457.8 8,778.3
Selling, general, and 3,236.1 2,951.8 2,623.6
administrative expenses
Divestitures (gain), net — (84.9) —
Restructuring, impairment, 31.4 41.6 21.0
and other exit costs
Operating profit 2,606.1 2,325.0 2,229.2
Interest, net 401.6 382.8 399.7
Earnings before income taxes 2,204.5 1,942.2 1,829.5
and after-tax earnings from joint ventures
Income taxes 771.2 720.4 622.2
After-tax earnings from joint ventures 101.7 91.9 110.8
Net earnings, including earnings 1,535.0 1,313.7 1,318.1
attributable to noncontrolling interests
Net earnings attributable to 4.5 9.3 23.4
noncontrolling interests
Net earnings attributable to General Mills $ 1,530.5 $ 1,304.4 $1,294.7
Earnings per share – basic $ 2.32 $ 1.96 $ 1.93
Earnings per share – diluted $ 2.24 $ 1.90 $ 1.85
Dividends per share $ 0.96 $ 0.86 $ 0.78
See accompanying notes to consolidated financial statements.
NOTE 17. SUPPLEMENTAL INFORMATION
The components of certain Consolidated Balance Sheet accounts are as follows:
In Million May 30,2010 May 31,2009
Receivables:
From customers $1,057.4 $971.2
Less allowance for doubtful
accounts (15.8) (17.8)
Total $1,041.6 $953.4
In Millions May 30, 2010 May 31,2009
Inventories:
Raw materials and packaging $ 247.5 $ 273.1
Finished goods 1,131.4 1,096.1
Grain 107.4 126.9
Excess of FIFO or weighted-
average cost over LIFO cost(a) (142.3) (149.3)
Total $1,344.0 $1,346.8
Inventories of $958.3 million as of May 30, 2010, and $908.3 million as of May 31, 2009, were valued at LIFO.