Posted: July 19th, 2016

Which items were included in comprehensive income?

1. Indicate how this transaction would be reported on Garnett’s statement of cash flows.
2. In the following list of transactions relating to this lease, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N).

Reduction of lease obligating (principal portion of lease payment)
Interest expense
Increase in deferred taxes

PROBLEM 10-9: Partial Classified Balance Sheet for Walgreens

The following items, listed alphabetically, appear on Walgreen’s consolidated balance sheet at August 31, 2010 (in millions).

Accrued expenses and other liabilities 2,763
Deferred income tax (long-term) 318
Long-term debt 2,389
Other noncurrent liabilities 1735
Short-term borrowing 12
Trade accounts payable 4585
Income Taxes 73

1. Prepare the Current Liabilities and Long-Term Liabilities sections of Walgreens’s classified balance sheet at August 31, 2010.

2. Walgreens had total liabilities of $10,766 and total shareholders’ equity of $14,376 at August 31, 2009. Total shareholders’ equity at August 31, 2010, amounted to $14,400. (All amounts are in millions.) Compute Walgreens’s debt-to-equity ratio at August 31, 2010 and 2009.

As an investor, how would you react to the changes in the ratio?

3. What other related ratios would the company’s lenders use to assess the company? What do these ratios measure? List as many as you determine needed.

PROBLEM 11-7: Wal-mart’s Comprehensive Income

Following is the consolidated statement of shareholders’ equity of Wal-Mart Stores, Inc., for the year ended January 31, 2010:
1. Which items were included in comprehensive income? If these items had been included on the income statement as part of net income, what would have been the effect?

2. Would the concept of comprehensive income help to explain to Wal-Mart’s stockholders the impact of all events that took place in 2010? Why or why not?