Use the following assumptions to prepare a forecast of the company’s income statement for fiscal year 2020. Note: Complete the entire question in Excel (template provided above). Using Excel, format each answer to two decimal places. Use Increase Decimal or Decrease Decimal to adjust decimal places. Do not round answers. Then enter the answers into the provided spaces below with _two decimal places_. Note: Use negative signs with answers, when appropriate. Income statement assumptions     Net sales increase 8% growth Cost of products sold 30.0% of net sales Research and development expense 7.6% of net sales Selling, general, and administrative expense 34.1% of net sales Amortization of intangible assets 5.8% of net sales Restructuring charges, net 75% of 2019 restructuring expense Certain litigation charges, net $150 million Other operating expense, net   No change in $ amount Other nonoperating income, net   No change in $ amount Interest expense   No change in $ amount Income tax provision 15% of pretax income Income attributable to noncontrolling interests   No change in $ amount     Balance sheet assumptions     Investments   No change Accounts receivable, less allowance 20.4% of net sales Inventories, net 12.3% of net sales Other current assets 7% of net sales Goodwill   No change Tax assets 5% of net sales Other assets 3.3% of net sales Accounts payable 6.4% of net sales Accrued compensation (current liability) 7.2% of net sales Accrued compensation and retirement benefits (noncurrent liability)   No change Accrued income taxes (current liability) 1.9% of net sales Other accrued expenses 9.6% of net sales Accrued income taxes (noncurrent liability) 9.3% of net sales Deferred tax liabilities 4.2% of net sales Other liabilities 2.5% of net sales Ordinary shares   No change Accumulated other comprehensive loss   No change Net income attributable to noncontrolling interest $19 million Dividends in FY2020 $2,853 million CAPEX in FY2019 $1,134 $million, forecast CAPEX at historic % of net sales Depreciation expense in FY2020 $950 million Amortization expense in FY2020 $1,914 million Debt due in FY2020 $838 million Debt due in FY2021 $2,058 million     Medtronic PLC     Consolidated Balance Sheet     $ millions 2020   Current assets     Cash and cash equivalents Answer     Investments Answer     Accounts receivable, net Answer     Inventories, net Answer     Other current assets Answer     Total current assets Answer     Property, plant, and equipment, net Answer     Goodwill Answer     Other intangible assets, net Answer     Tax assets Answer     Other assets Answer     Total assets Answer     Current liabilities     Current debt obligations Answer     Accounts payable Answer     Accrued compensation Answer     Accrued income taxes Answer     Other accrued expenses Answer     Total current liabilities Answer     Long-term debt Answer     Accrued compensation and retirement benefits Answer     Accrued income taxes Answer     Deferred tax liabilities Answer     Other liabilities Answer     Total liabilities Answer     Shareholders’ equity     Ordinary shares Answer     Additional paid-in capital Answer     Retained earnings Answer     Accumulated other comprehensive loss Answer     Total shareholders’ equity Answer     Noncontrolling interests Answer     Total equity Answer     Total liabilities and equity

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question

Forecast Income Statement and Balance Sheet

Following are the income statement and balance sheet for Medtronic PLC.

Note: Complete the entire question using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places.

Medtronic PLC  
Consolidated Statement of Income  
$ millions, For Fiscal Year Ended April 26, 2019
Net sales $30,557
Costs and expenses  
Cost of products sold 9,155
Research and development expense 979
Selling, general, and administrative expense 10,418
Amortization of intangible assets 1,764
Restructuring charges, net 83
Certain litigation charges, net 166
Other operating expense, net 258
Operating profit 7,734
Other nonoperating income, net (157)
Interest expense 1,444
Income before income taxes 6,447
Income tax provision 547
Net income 5,900
Net income loss attributable to noncontrolling interests (19)
Net income attributable to Medtronic $5,881

 

Medtronic PLC  
Consolidated Balance Sheet  
$ millions April 26, 2019
Current assets  
Cash and cash equivalents $4,393
Investments 5,455
Accounts receivable, net 6,222
Inventories, net 3,753
Other current assets 900
Total current assets 20,723
Property, plant, and equipment, net 4,675
Goodwill 39,959
Other intangible assets, net 20,560
Tax assets 638
Other assets 1,014
Total assets $87,569
Current liabilities  
Current debt obligations $838
Accounts payable 1,953
Accrued compensation 2,189
Accrued income taxes 567
Other accrued expenses 2,925
Total current liabilities 8,472
Long-term debt 24,486
Accrued compensation and retirement benefits 1,651
Accrued income taxes 2,838
Deferred tax liabilities 1,278
Other liabilities 318
Total liabilities 39,043
Shareholders’ equity  
Ordinary shares 0
Additional paid-in capital 24,846
Retained earnings 26,270
Accumulated other comprehensive loss (2,711)
Total shareholders’ equity 48,405
Noncontrolling interests 121
Total equity 48,526
Total liabilities and equity $87,569

Use the following assumptions to prepare a forecast of the company’s income statement for fiscal year 2020.
Note: Complete the entire question in Excel (template provided above). Using Excel, format each answer to two decimal places. Use Increase Decimal or Decrease Decimal to adjust decimal places. Do not round answers. Then enter the answers into the provided spaces below with _two decimal places_.
Note: Use negative signs with answers, when appropriate.

Income statement assumptions    
Net sales increase 8% growth
Cost of products sold 30.0% of net sales
Research and development expense 7.6% of net sales
Selling, general, and administrative expense 34.1% of net sales
Amortization of intangible assets 5.8% of net sales
Restructuring charges, net 75% of 2019 restructuring expense
Certain litigation charges, net $150 million
Other operating expense, net   No change in $ amount
Other nonoperating income, net   No change in $ amount
Interest expense   No change in $ amount
Income tax provision 15% of pretax income
Income attributable to noncontrolling interests  

No change in $ amount

 

 

Balance sheet assumptions    
Investments   No change
Accounts receivable, less allowance 20.4% of net sales
Inventories, net 12.3% of net sales
Other current assets 7% of net sales
Goodwill   No change
Tax assets 5% of net sales
Other assets 3.3% of net sales
Accounts payable 6.4% of net sales
Accrued compensation (current liability) 7.2% of net sales
Accrued compensation and retirement benefits (noncurrent liability)   No change
Accrued income taxes (current liability) 1.9% of net sales
Other accrued expenses 9.6% of net sales
Accrued income taxes (noncurrent liability) 9.3% of net sales
Deferred tax liabilities 4.2% of net sales
Other liabilities 2.5% of net sales
Ordinary shares   No change
Accumulated other comprehensive loss   No change
Net income attributable to noncontrolling interest $19 million
Dividends in FY2020 $2,853 million
CAPEX in FY2019 $1,134 $million, forecast CAPEX at historic % of net sales
Depreciation expense in FY2020 $950 million
Amortization expense in FY2020 $1,914 million
Debt due in FY2020 $838 million
Debt due in FY2021 $2,058 million

 

  Medtronic PLC  
  Consolidated Balance Sheet  
  $ millions 2020
  Current assets  
  Cash and cash equivalents Answer
 
  Investments Answer
 
  Accounts receivable, net Answer
 
  Inventories, net Answer
 
  Other current assets Answer
 
  Total current assets Answer
 
  Property, plant, and equipment, net Answer
 
  Goodwill Answer
 
  Other intangible assets, net Answer
 
  Tax assets Answer
 
  Other assets Answer
 
  Total assets Answer
 
  Current liabilities  
  Current debt obligations Answer
 
  Accounts payable Answer
 
  Accrued compensation Answer
 
  Accrued income taxes Answer
 
  Other accrued expenses Answer
 
  Total current liabilities Answer
 
  Long-term debt Answer
 
  Accrued compensation and retirement benefits Answer
 
  Accrued income taxes Answer
 
  Deferred tax liabilities Answer
 
  Other liabilities Answer
 
  Total liabilities Answer
 
  Shareholders’ equity  
  Ordinary shares Answer
 
  Additional paid-in capital Answer
 
  Retained earnings Answer
 
  Accumulated other comprehensive loss Answer
 
  Total shareholders’ equity Answer
 
  Noncontrolling interests Answer
 
  Total equity Answer
 
  Total liabilities and equity Answer
 
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