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For each company, what are the numbers of shares of common stock authorized, issued, and outstanding as of the balance sheet date? Did the balance of the Retained Earnings account of each company increase or decrease dur- ing the year? What factors can affect the Retained Earnings balance? How does the total stockholders' equity of each company compare to that of the other company? Does the difference mean that one company's stock is more valuable than the other's? Explain your answer.

For each company, what are the numbers of shares of common stock authorized, issued, and outstanding as of the balance sheet date? Did the balance of the Retained Earnings account of each company increase or decrease dur- ing the year? What factors can affect the Retained Earnings balance? How does the total stockholders' equity of each company compare to that of the other company? Does the difference mean that one company's stock is more valuable than the other's? Explain your answer.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Decision Case 11-1 Comparing Two Companies in the Same Industry: Kellogg's and General Mills

Refer to the Stockholders' Equity Section of the balance sheets of Kellogg's as of December 31, 2010, and General Mills as of May 30, 2010.

Required

  1. For each company, what are the numbers of shares of common stock authorized, issued, and outstanding as of the balance sheet date?

  2. Did the balance of the Retained Earnings account of each company increase or decrease dur- ing the year? What factors can affect the Retained Earnings balance?

  3. How does the total stockholders' equity of each company compare to that of the other company? Does the difference mean that one company's stock is more valuable than the other's? Explain your answer.

Kellogg Company and Subsidiaries Consolidated Balance Sheet (milions, except share data) 2010 2009 Current assets $ 44 1,190 1,056 Cash and cash equivalents $ 334 Accounts receivable, net 1,093 Inventories 910 Other current assets 225 221 Total current assets 2,915 2,558 3,128 3,010 Property, net Goodwill 3,628 3,643 Other intangibles, net 1,456 1,458 Other assets 720 531 Total assets $11,847 $11,200 Current llabilities Current maturities ofi ong-term debt $ 952 1 Notes payable Accounts payable 44 44 1,149 1,039 1,077 1,166 Other current liabilities Total current liabilities 3,184 2,288 4.908 4,835 Long-term debt Deferred income taxes 697 425 Pension liability 265 430 Other liabilities 639 947 Commitments and contingencies Equity Common stock, 5.25 par value, 1,000,000,000 shares authorized Issued: 419,272,027 shares in 2010 and 419,058,168 shares in 2009 105 105 Capital in excess of par value Retained eamings 495 472 6,122 5,481 Treasury stock at cost 53,667,635 shares in 2010 and 37,678,215 shares in 2009 Accumulated other comprehensive income (loss) (2,650) (1,820) (1,914) (1,966) Total Kellogg Company equity Noncontrolling interests 2,158 (4) 2,272 Total equity Total liabilities and equity 2,154 2,275 $11,847 $11,200 Refer to Notes to Consolidated Financial Statements.
Transcribed Image Text:Kellogg Company and Subsidiaries Consolidated Balance Sheet (milions, except share data) 2010 2009 Current assets $ 44 1,190 1,056 Cash and cash equivalents $ 334 Accounts receivable, net 1,093 Inventories 910 Other current assets 225 221 Total current assets 2,915 2,558 3,128 3,010 Property, net Goodwill 3,628 3,643 Other intangibles, net 1,456 1,458 Other assets 720 531 Total assets $11,847 $11,200 Current llabilities Current maturities ofi ong-term debt $ 952 1 Notes payable Accounts payable 44 44 1,149 1,039 1,077 1,166 Other current liabilities Total current liabilities 3,184 2,288 4.908 4,835 Long-term debt Deferred income taxes 697 425 Pension liability 265 430 Other liabilities 639 947 Commitments and contingencies Equity Common stock, 5.25 par value, 1,000,000,000 shares authorized Issued: 419,272,027 shares in 2010 and 419,058,168 shares in 2009 105 105 Capital in excess of par value Retained eamings 495 472 6,122 5,481 Treasury stock at cost 53,667,635 shares in 2010 and 37,678,215 shares in 2009 Accumulated other comprehensive income (loss) (2,650) (1,820) (1,914) (1,966) Total Kellogg Company equity Noncontrolling interests 2,158 (4) 2,272 Total equity Total liabilities and equity 2,154 2,275 $11,847 $11,200 Refer to Notes to Consolidated Financial Statements.
Appendix C Excerpts from General Mills's Form 10-K for the Fiscal Year Ended May 30, 2010 [2010) C-5 Consolidated Balance Sheets GENERAL MILLS, INC. AND SUBSIDIARIES (In Millions, Except Par Value) May 30, 2010 May 31, 2009 ASSETS Current assets: Cash and cash equivalents Receivables Inventories Deferred income taxes Prepaid expenNes and other current assets 673.2 $ 1,041.6 1,344.0 42.7 378.5 749.8 953,4 1,346.8 15.6 469.3 Total current assets 3,480.0 3,534.9 Land, huildings, and equipment Goodwill Other intangible assets Other assets 3,127.7 6,592.8 3,715.0 763.4 3,034.9 6,663.0 3,747.0 895.0 Total assets 17,678.9 $ 17.874.8 LIABILITIES AND EQUITY Current liabilities: Accounts payahle Current portion of long-term deht Notes payahle %24 849.5 $ 107.3 1,050.1 1.762 2 803.4 S08.5 812.2 1.481.9 Other current liahilities Total current liabilities 3,769.1 3,606.0 Long-term debt Deferred income taxes Other liabilities 5,268.5 874.6 5,754.8 1,165.3 1.932.2 2,118.7 Total liabilities 12.030.9 12.458.3 Stockholders' equity: Common stock, 754.6 shures issued. $0.10 par value Additional puid-in capital Retained earnings Common stock in treasury. at cost, shares of 98.1 and 98.6 Accumulated other comprehensive loss 75.5 1.307.1 8,122.4 (2,615.21 (1,486.9) 75.5 1.212.1 7.235.6 (2,473.1) (877,8) Total stockholders' equity 5,402.9 5,172.3 Noncontrolling interests 245.1 244.2 Total equity 5,648.0 5,416.5 Total liabilities and cquity 17.678.9 17.874.8 See accompanying notes to consolidated financial statements,
Transcribed Image Text:Appendix C Excerpts from General Mills's Form 10-K for the Fiscal Year Ended May 30, 2010 [2010) C-5 Consolidated Balance Sheets GENERAL MILLS, INC. AND SUBSIDIARIES (In Millions, Except Par Value) May 30, 2010 May 31, 2009 ASSETS Current assets: Cash and cash equivalents Receivables Inventories Deferred income taxes Prepaid expenNes and other current assets 673.2 $ 1,041.6 1,344.0 42.7 378.5 749.8 953,4 1,346.8 15.6 469.3 Total current assets 3,480.0 3,534.9 Land, huildings, and equipment Goodwill Other intangible assets Other assets 3,127.7 6,592.8 3,715.0 763.4 3,034.9 6,663.0 3,747.0 895.0 Total assets 17,678.9 $ 17.874.8 LIABILITIES AND EQUITY Current liabilities: Accounts payahle Current portion of long-term deht Notes payahle %24 849.5 $ 107.3 1,050.1 1.762 2 803.4 S08.5 812.2 1.481.9 Other current liahilities Total current liabilities 3,769.1 3,606.0 Long-term debt Deferred income taxes Other liabilities 5,268.5 874.6 5,754.8 1,165.3 1.932.2 2,118.7 Total liabilities 12.030.9 12.458.3 Stockholders' equity: Common stock, 754.6 shures issued. $0.10 par value Additional puid-in capital Retained earnings Common stock in treasury. at cost, shares of 98.1 and 98.6 Accumulated other comprehensive loss 75.5 1.307.1 8,122.4 (2,615.21 (1,486.9) 75.5 1.212.1 7.235.6 (2,473.1) (877,8) Total stockholders' equity 5,402.9 5,172.3 Noncontrolling interests 245.1 244.2 Total equity 5,648.0 5,416.5 Total liabilities and cquity 17.678.9 17.874.8 See accompanying notes to consolidated financial statements,
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