Forecast the Statement of Cash FlowsFollowing are the income statements and balance sheets of Best Buy Co., Inc.Income Statement,Fiscal Years Ended ($ millions)2012EstimatedFeb. 26,2011Revenue$52,534$50,272Cost of goods sold39,29537,611Restructuring charges - cost of goods sold--24Gross profit13,23912,637Selling, general and administrative expenses10,76910,325Restructuring charges--198Goodwill and tradename impairment----Operating income2,4702,114Other income (expenses) Investment income and other5151Interest expense(87)(87)Earnings before income tax expense and equity in income of affiliates2,4342,078Income tax expense837714Equity in income of affiliates22Net earnings including noncontrolling interests1,5991,366Net earnings attributable to noncontrolling interests(120)(89)Net earnings attributable to Best Buy Co., Inc.$1,479$1,277Balance Sheet($ millions)2012EstimatedFeb. 26,2011Assets Cash and cash equivalents$1,156$1,103Short-term investments88322Receivables2,4692,348Merchandise inventories6,1465,897Other current assets1,1561,103Total current assets11,81010,473Gross property and equipment8,6937,905Less accumulated depreciation5,0314,082Net property and equipment3,6623,823Goodwill2,4542,454Tradenames, Net108133Customer Relationships, Net165203Equity and Other Investments328328Other assets473435Total assets$ 19,000$ 17,849Liabilities and Equity Accounts payable$ 5,096$ 4,894Unredeemed giftcard liabilities473474Accrued compensation and related expenses578570Accrued liabilities1,5231,471Accrued income taxes263256Short-term debt557557Current portion of long-term debt37441Total current liabilities8,5278,663Long-term liabilities1,1831,183Long-term debt674711Best 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, respectively3939Additional paid-in capital1818Retained earnings7,5766,372Accumulated other comprehensive income173173Total Best Buy Co., Inc. shareholders' equity7,8066,602Noncontrolling interests810690Total equity8,6167,292Total liabilities and shareholders' equity$19,000$17,849 CAPEX (Increase in gross Property and equipment)/Net sales1.50%Depreciation expense/Prior year gross PPE12.00%Dividends/Net income18.60%Long-term debt payments required in fiscal 2013$37 Refer to the financial information above for Best Buy Co., Inc. Prepare a forecast of its financial year 2012 statement of cash flows. (Hint: Use net income including noncontrolling interests to begin the statement of cash flows. Use negative signs in answers when appropriate.)Round all answers to the nearest whole number. Use negative signs with answers, when appropriate.Best Buy Forecasted Statement of Cash Flows($ millions)2012 EstimatedNet income including noncontrolling interestsAnswer Add: depreciationAnswer Add: amortizationAnswer Change in Accounts receivableAnswer Change in InventoriesAnswer Change in Other current assetsAnswer Change in Other long-term assetsAnswer Change in Accounts payableAnswer Change in Unredeemed gift card liabilitiesAnswer Change in Accrued compensation and related expensesAnswer Change in Accrued liabilitiesAnswer Change in Accrued income taxesAnswer Net cash from operating activitiesAnswer Capital expendituresAnswer Increase in Short-term investmentsAnswer Net cash from investing activitiesAnswer DividendsAnswer Payments of LT debtAnswer Net cash from financing activitiesAnswer Net change in cashAnswer Beginning cashAnswer Ending cashAnswer

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Answered: Prepare a forecast of its financial…

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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Forecast the Statement of Cash Flows
Following are the income statements and balance sheets of Best Buy Co., Inc.

Income Statement, Fiscal Years Ended ($ millions)	2012 Estimated	Feb. 26, 2011
Revenue	$52,534	$50,272
Cost of goods sold	39,295	37,611
Restructuring charges - cost of goods sold	--	24
Gross profit	13,239	12,637
Selling, general and administrative expenses	10,769	10,325
Restructuring charges	--	198
Goodwill and tradename impairment	--	--
Operating income	2,470	2,114
Other income (expenses)
Investment income and other	51	51
Interest expense	(87)	(87)
Earnings before income tax expense and equity in income of affiliates	2,434	2,078
Income tax expense	837	714
Equity in income of affiliates	2	2
Net earnings including noncontrolling interests	1,599	1,366
Net earnings attributable to noncontrolling interests	(120)	(89)
Net earnings attributable to Best Buy Co., Inc.	$1,479	$1,277

Balance Sheet ($ millions)	2012 Estimated	Feb. 26, 2011
Assets
Cash and cash equivalents	$1,156	$1,103
Short-term investments	883	22
Receivables	2,469	2,348
Merchandise inventories	6,146	5,897
Other current assets	1,156	1,103
Total current assets	11,810	10,473
Gross property and equipment	8,693	7,905
Less accumulated depreciation	5,031	4,082
Net property and equipment	3,662	3,823
Goodwill	2,454	2,454
Tradenames, Net	108	133
Customer Relationships, Net	165	203
Equity and Other Investments	328	328
Other assets	473	435
Total assets	$ 19,000	$ 17,849
Liabilities and Equity
Accounts payable	$ 5,096	$ 4,894
Unredeemed giftcard liabilities	473	474
Accrued compensation and related expenses	578	570
Accrued liabilities	1,523	1,471
Accrued income taxes	263	256
Short-term debt	557	557
Current portion of long-term debt	37	441
Total current liabilities	8,527	8,663
Long-term liabilities	1,183	1,183
Long-term debt	674	711
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	39
Additional paid-in capital	18	18
Retained earnings	7,576	6,372
Accumulated other comprehensive income	173	173
Total Best Buy Co., Inc. shareholders' equity	7,806	6,602
Noncontrolling interests	810	690
Total equity	8,616	7,292
Total liabilities and shareholders' equity	$19,000	$17,849

CAPEX (Increase in gross Property and equipment)/Net sales	1.50%
Depreciation expense/Prior year gross PPE	12.00%
Dividends/Net income	18.60%
Long-term debt payments required in fiscal 2013	$37

Refer to the financial information above for Best Buy Co., Inc. Prepare a forecast of its financial year 2012 statement of cash flows. (Hint: Use net income including noncontrolling interests to begin the statement of cash flows. Use negative signs in answers when appropriate.)

Round all answers to the nearest whole number. Use negative signs with answers, when appropriate.

Best Buy Forecasted Statement of Cash Flows
($ millions)	2012 Estimated
Net income including noncontrolling interests	Answer
Add: depreciation	Answer
Add: amortization	Answer
Change in Accounts receivable	Answer
Change in Inventories	Answer
Change in Other current assets	Answer
Change in Other long-term assets	Answer
Change in Accounts payable	Answer
Change in Unredeemed gift card liabilities	Answer
Change in Accrued compensation and related expenses	Answer
Change in Accrued liabilities	Answer
Change in Accrued income taxes	Answer
Net cash from operating activities	Answer
Capital expenditures	Answer
Increase in Short-term investments	Answer
Net cash from investing activities	Answer
Dividends	Answer
Payments of LT debt	Answer
Net cash from financing activities	Answer
Net change in cash	Answer
Beginning cash	Answer
Ending cash	Answer

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