Answers for Concept Questions:
a) General Mills is a leading producer of packaged consumer foods. According to the financial statements, General Mills makes most of the money from sales. They have 3 segments: US Retail, International and Bakeries and Food Services.
1) The following are the financial statements that are commonly prepared for external reporting purposes:
* Balance Sheet * Income Statement * Statement of cash flows * Statement of Stockholder’s equity
2) General Mills gives the following titles for these financial statements: * Balance Sheet: Consolidated Balance Sheet * Income Statement: Consolidated Statement of Earnings * Statement of Cash Flows: Consolidated
…show more content…
The total long term assets are $15031. The proportion of short term assets to long term assets is 0.21 or 21%. The proportion of short term assets as compared to long term assets seems appropriate. The company has enough current assets for liquidity purposes. It only seems fair that a company as big as General Mills has a goodwill value as high as mentioned in the balance sheet. The company has invested on long term assets such as Building, land and equipments too. (iii) Intangible assets are assets that cannot be seen or touched, which are created through time and/or effort and that are identifiable as a separate asset. The difference between the purchase price and the sum of the fair value of the net assets is the value of goodwill. Goodwill serves as the balancing sum that allows one firm to provide accounting information regarding its purchase of another firm for a price substantially different from its book value. General mills could have intangible assets such as patents, copyrights, trademarks, trade secrets etc. (iv) General Mills is mainly financed by non owners such as banks/creditors. The company is also financed by stockholder’s equity. The total amount financed by non owners = $11299. The proportion of assets financed by the non owners to the total asset financing = 0.62 or 62%.
h) (i) General Mills Revenue Recognition policy is consistent with GAAP revenue recognition criteria. General Mills recognizes sales