How do you forecast retained earnings? Please show steps and formula.Following are the income statements and balance sheets of Best Buy Co., Inc.Income Statement, Fiscal Years EndedFeb. 26, 2011Feb. 27, 2010Revenue$ 50,272$ 49,694Cost of goods sold37,61137,534Restructuring charges - cost of goods sold24--Gross profit12,63712,160Selling, general and administrative expenses10,3259,873Restructuring charges19852Goodwill and tradename impairment----Operating income2,1142,235Other income (expenses) Investment income and other5154Interest expense8794Earnings before income tax expense and equity in income of affiliates2,0782,195Income tax expense714802Equity in income of affiliates21Net earnings including noncontrolling interests1,3661,394Net (earnings) attributable to noncontrolling interests8977Net earnings attributable to Best Buy Co., Inc.$ 1,277$ 1,317Balance SheetFeb. 26, 2011Feb. 27, 2010Assets Cash and cash equivalents$ 1,103$ 1,826Short-term investments2290Receivables2,3482,020Merchandise inventories5,8975,486Other current assets1,1031,144Total current assets10,47310,566Property and equipment Land and buildings766757Leasehold improvements2,3182,154Fixtures and equipment4,7014,447Property under capital lease12095Gross property and equipment7,9057,453Less accumulated depreciation4,0823,383Net property and equipment3,8234,070Goodwill2,4542,452Tradenames, Net133159Customer Relationships, Net203279Equity and Other Investments328324Other assets435452Total assets$ 17,849$ 18,302Liabilities and Equity Accounts payable$ 4,894$ 5,276Unredeemed giftcard liabilities474463Accrued compensation and related expenses570544Accrued liabilities1,4711,681Accrued income taxes256316Short-term debt557663Current portion of long-term debt44135Total current liabilities8,6638,978Long-term liabilities1,1831,256Long-term debt7111,104Best Buy Co., Inc. Shareholders' Equity Preferred stock, $ 1.00 par value: Authorized-400,000 shares; Issued and outstanding-none----Common stock $0.10 par value: Authorized-1.0 billion shares; Issued and outstanding-392,590,000 and 418,815,000 shares, respectively3942Additional paid-in capital18441Retained earnings6,3725,797Accumulated other comprehensive income17340Total Best Buy Co., Inc. shareholders' equity6,6026,320Noncontrolling interests690644Total equity7,2926,964Total liabilities and shareholders' equity$ 17,849$ 18,302 Forecast Best Buy's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed). Revenue growth4.5%Cost of good sold/Revenue74.8%Restructuring charges - cost of good sold$--Selling, general and administrative expenses/Revenue20.5%Restructuring charges$--Goodwill and trademark impairment$--Investment income and other$51Investment impairment$--Interest expense$87Income tax expense/Pretax income34.4%Equity in income of affiliates$2Net earnings attributable to noncontrolling interests/Net earnings including noncontrolling interests7.5% Round all answers to the nearest whole number Forecast Best Buy's fiscal 2012 balance sheet using the following relations (assume "no change" for accounts not listed). Assume that all capital expenditures are purchases of property and equipment.Short-term investmentsNo changeReceivables/Revenue4.7%Merchandise inventories/Revenue11.7%Other current assets/Revenue2.2%CAPEX (Increase in gross Property and equipment)/Revenue1.5%GoodwillNo changeAmortization expense for Tradenames$25Amortization expense for Customer relationships$38Equity and Other InvestmentsNo changeOther Assets/Revenue0.9%Accounts payable/Revenue9.7%Unredeemed gift card liabilities/Revenue0.9%Accrued compensation and related expenses/Revenue1.1%Accrued liabilities/Revenue2.9%Accrued income taxes/Revenue0.5%Long-term liabilitiesNo changeNoncontrolling interests*Depreciation/Prior year gross PPE12.0%Amortization/Prior year intangible asset balance18.7%Dividends/Net income18.6%Long-term debt payments required in fiscal 2013$37*increase by net income attributable to noncontrolling interests and assume no dividends

Best Buy Co. Statement of Balance Sheet for the year ended 31st December 2012

Answered: Forecast Best Buy's fiscal 2012 balance…

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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How do you forecast retained earnings? Please show steps and formula.

Following are the income statements and balance sheets of Best Buy Co., Inc.

Income Statement, Fiscal Years Ended	Feb. 26, 2011	Feb. 27, 2010
Revenue	$ 50,272	$ 49,694
Cost of goods sold	37,611	37,534
Restructuring charges - cost of goods sold	24	--
Gross profit	12,637	12,160
Selling, general and administrative expenses	10,325	9,873
Restructuring charges	198	52
Goodwill and tradename impairment	--	--
Operating income	2,114	2,235
Other income (expenses)
Investment income and other	51	54
Interest expense	87	94
Earnings before income tax expense and equity in income of affiliates	2,078	2,195
Income tax expense	714	802
Equity in income of affiliates	2	1
Net earnings including noncontrolling interests	1,366	1,394
Net (earnings) attributable to noncontrolling interests	89	77
Net earnings attributable to Best Buy Co., Inc.	$ 1,277	$ 1,317

Balance Sheet	Feb. 26, 2011	Feb. 27, 2010
Assets
Cash and cash equivalents	$ 1,103	$ 1,826
Short-term investments	22	90
Receivables	2,348	2,020
Merchandise inventories	5,897	5,486
Other current assets	1,103	1,144
Total current assets	10,473	10,566
Property and equipment
Land and buildings	766	757
Leasehold improvements	2,318	2,154
Fixtures and equipment	4,701	4,447
Property under capital lease	120	95
Gross property and equipment	7,905	7,453
Less accumulated depreciation	4,082	3,383
Net property and equipment	3,823	4,070
Goodwill	2,454	2,452
Tradenames, Net	133	159
Customer Relationships, Net	203	279
Equity and Other Investments	328	324
Other assets	435	452
Total assets	$ 17,849	$ 18,302
Liabilities and Equity
Accounts payable	$ 4,894	$ 5,276
Unredeemed giftcard liabilities	474	463
Accrued compensation and related expenses	570	544
Accrued liabilities	1,471	1,681
Accrued income taxes	256	316
Short-term debt	557	663
Current portion of long-term debt	441	35
Total current liabilities	8,663	8,978
Long-term liabilities	1,183	1,256
Long-term debt	711	1,104
Best Buy Co., Inc. Shareholders' Equity
Preferred stock, $ 1.00 par value: Authorized-400,000 shares; Issued and outstanding-none	--	--
Common stock $0.10 par value: Authorized-1.0 billion shares; Issued and outstanding-392,590,000 and 418,815,000 shares, respectively	39	42
Additional paid-in capital	18	441
Retained earnings	6,372	5,797
Accumulated other comprehensive income	173	40
Total Best Buy Co., Inc. shareholders' equity	6,602	6,320
Noncontrolling interests	690	644
Total equity	7,292	6,964
Total liabilities and shareholders' equity	$ 17,849	$ 18,302

Forecast Best Buy's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed).

Revenue growth	4.5%
Cost of good sold/Revenue	74.8%
Restructuring charges - cost of good sold	$--
Selling, general and administrative expenses/Revenue	20.5%
Restructuring charges	$--
Goodwill and trademark impairment	$--
Investment income and other	$51
Investment impairment	$--
Interest expense	$87
Income tax expense/Pretax income	34.4%
Equity in income of affiliates	$2
Net earnings attributable to noncontrolling interests/Net earnings including noncontrolling interests	7.5%

Round all answers to the nearest whole number

Forecast Best Buy's fiscal 2012 balance sheet using the following relations (assume "no change" for accounts not listed). Assume that all capital expenditures are purchases of property and equipment.

Short-term investments	No change
Receivables/Revenue	4.7%
Merchandise inventories/Revenue	11.7%
Other current assets/Revenue	2.2%
CAPEX (Increase in gross Property and equipment)/Revenue	1.5%
Goodwill	No change
Amortization expense for Tradenames	$25
Amortization expense for Customer relationships	$38
Equity and Other Investments	No change
Other Assets/Revenue	0.9%
Accounts payable/Revenue	9.7%
Unredeemed gift card liabilities/Revenue	0.9%
Accrued compensation and related expenses/Revenue	1.1%
Accrued liabilities/Revenue	2.9%
Accrued income taxes/Revenue	0.5%
Long-term liabilities	No change
Noncontrolling interests	*
Depreciation/Prior year gross PPE	12.0%
Amortization/Prior year intangible asset balance	18.7%
Dividends/Net income	18.6%
Long-term debt payments required in fiscal 2013	$37
*increase by net income attributable to noncontrolling interests and assume no dividends

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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