Questions
Forecast the Balance Sheet Following is the balance sheet for Medtronic PLC for the year ended...

Forecast the Balance Sheet

Following is the balance sheet for Medtronic PLC for the year ended April 29, 2016.

Medtronic plc
Consolidated Balance Sheets
($ millions) Apr. 29, 2016 Apr. 24, 2015
Current assets
Cash and cash equivalents $3,221 $4,843
Investments 9,758 14,637
Accounts receivable 5,562 5,112
Inventories 3,473 3,463
Tax assets 697 1,335
Prepaid expenses and other current assets 1,234 1,454
Total current assets 23,945 30,844
Property, plant, and equipment, net 4,841 4,699
Goodwill 41,500 40,530
Other intangible assets, net 26,899 28,101
Long-term tax assets 1,383 774
Other assets 1,559 1,737
Total assets $100,127 $106,685
Current liabilities
Short-term borrowings $1,338 $2,434
Accounts payable 1,709 1,610
Accrued compensation 1,712 1,611
Accrued income taxes 566 935
Deferred tax liabilities - 119
Other accrued expenses 2,185 2,464
Total current liabilities 7,510 9,173
Long-term debt 30,247 33,752
Long-term accrued compensation 1,759 1,535
Long-term accrued income taxes 2,903 2,476
Long-term deferred tax liabilities 3,729 4,700
Other long-term liabilities 1,916 1,819
Total liabilities 48,064 53,455
Shareholders’ equity
Ordinary shares - -
Retained earnings 53,931 54,414
Accumulated other comprehensive (loss) (1,868) (1,184)
Total shareholders’ equity 52,063 53,230
Total liabilities and shareholders’ equity $100,127 $106,685

Use the following assumptions to forecast the company’s balance sheet for FY2017.

Forecasted FY2017 net income $5,486

million
Forecasted FY2017 net sales $38,632

million
Accounts receivable 19.3%

of net sales
Inventories 12.0%

of net sales
Tax assets 2.4%

of net sales
Prepaid expenses and other current assets 4.3%

of net sales
Long-term tax assets 4.8%

of net sales
Other assets 5.4%

of net sales
Accounts payable 5.9%

of net sales
Accrued compensation 5.9%

of net sales
Accrued income taxes 2.0%

of net sales
Other accrued expenses 7.6%

of net sales
Long-term accrued income taxes 10.1%

of net sales
Long-term deferred tax liabilities 12.9%

of net sales
Other long-term liabilities 6.6%

of net sales
Investments No change
Goodwill No change
Long-term accrued compensation and retirement benefits No change
Ordinary shares No change
Accumulated other comprehensive (loss) No change
CAPEX 3.6%

of net sales
Depreciation expense 18.9%

of prior year PPE, net
Amortization expense in FY2016 $1,931

million
Current maturities of debt due in FY2017 $1,338

million
Current maturities of debt due in FY2018 $6,176

million
Dividend payout ratio 60.5%

  • Round your answers to the nearest whole number.

  • Do not use negative signs with any of your answers.

Medtronic plc
Forecasted Consolidated Balance Sheet
($ millions) EST. 2017
Current assets
Cash and cash equivalents Answer
Investments Answer
Accounts receivable Answer
Inventories Answer
Tax assets Answer
Prepaid expenses and other current assets Answer
Total current assets Answer
Property, plant, and equipment, net Answer
Goodwill Answer
Other intangible assets, net Answer
Long-term tax assets Answer
Other assets Answer
Total assets Answer
Current liabilities
Short-term borrowings Answer
Accounts payable Answer
Accrued compensation Answer
Accrued income taxes Answer
Other accrued expenses Answer
Total current liabilities Answer
Long-term debt Answer
Long-term accrued compensation Answer
Long-term accrued income taxes Answer
Long-term deferred tax liabilities Answer
Other long-term liabilities Answer
Total liabilities Answer
Shareholders’ equity
Ordinary shares -
Retained earnings Answer
Accumulated other comprehensive (loss) Answer
Total shareholders’ equity Answer
Total liabilities and shareholders’ equity Answer

In: Accounting

At the start of the current financial year Paul decided to purchase a newly constructed apartment...

At the start of the current financial year Paul decided to purchase a newly constructed apartment in the city for $400,000 which he hopes will increase his long-term wealth and create some tax deductions given that he is on a 46.5% marginal tax rate. He used $80,000 of his own money as a deposit and borrowed the remaining $320,000 from Fast Finance on an interest-only loan for 5 years at a fixed interest rate of 7% p.a.. Some additional details regarding the property purchase are listed below:

Purchase price of $400,000 consisting of $375,000 for the building costs and $25,000 for depreciable plant and equipment. A building allowance of 2.5% p.a. and plant and equipment depreciation of 20% p.a. is available for the purchase on a straight-line basis. Property rental of 6% p.a. gross (of the total purchase cost) with annual cash-based operating expenses (excluding financing) of $10,000.

(a) Paul asks you to prepare a table to show how the income from the apartment would be taxed and how it would affect his after-tax cash flow. Use the information provided to complete the pro-forma table below for the first year after the property purchase.

                        Cash flow Details $

                        Gross rent

                        Less property expenses paid in cash

                        Less interest payments

                        Net cash outflow before tax (A)

                        Less depreciation of building

                        Less depreciation of furniture, fittings, etc.

                        Taxable income

                        Tax loss (i.e. tax savings) (B)

                        After-tax cash flow (B-A)

In: Accounting

Consider a project to supply 100 million postage stamps per year to the USPS for the...

Consider a project to supply 100 million postage stamps per year to the USPS for the next five years. To pursue the project, you will need to install $4.1 million in new manufacturing plant and equipment. This will be depreciated straight-line to zero over the project’s five years. The equipment can be sold for $540,000 at the end of the project. You will also need $600,000 in initial net working capital for the project and an additional investment of $50,000 in every year thereafter. All net working capital will be recouped at the end of the project. Your production costs are $.005 per stamp and you have fixed costs of $950,000 per year. If your tax rate is 34% and your required return is 12%, what bid price should you submit on the contract.

In: Finance

A marketing researcher wants to estimate the mean amount spent per year​ ($) on a web...

A marketing researcher wants to estimate the mean amount spent per year​ ($) on a web site by membership member shoppers. Suppose a random sample of 100 membership member shoppers who recently made a purchase on the web site yielded a mean amount spent of $57 and a standard deviation of ​$ 54 Complete parts​ (a) and​ (b) below.

a. Is there evidence that the population mean amount spent per year on the web site by membership member shoppers is different from %51 (Using a .01 level of significance)

Identify the critical​ value(s).

Determine the test statistic.

State the conclusion.

Determine the​ p-value and interpret its meaning

In: Math

The January 1, Year 1 trial balance for the Wilson Company is found on the trial...

The January 1, Year 1 trial balance for the Wilson Company is found on the trial balance tab. The beginning balances are assumed. Smith Co. entered into the following transactions involving short-term liabilities. (Use 360 days a year.) Year 1 Apr. 20 Purchased $43,750 of merchandise on credit from Sanchez, terms n/30. May 19 Replaced the April 20 account payable to Sanchez with a 90-day, 8%, $38,000 note payable along with paying $5,750 in cash. July 8 Borrowed $102,000 cash from NBR Bank by signing a 120-day, 12%, $102,000 note payable. Aug. 17 Paid the amount due on the note to Sanchez at the maturity date. Nov. 5 Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $63,000 cash from Chicago Bank by signing a 60-day, 12%, $63,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Year 2 Jan. 27 Paid the amount due on the note to Chicago Bank at the maturity date.

General Journal tab - Prepare the Year 1 journal entries related to the notes and accounts payable of Smith Co.

Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries. Verify that total interest expense agrees with the trial balance.

Year 2 payment tab - Prepare the January 27, Year 2 entry to record the repayment of the note at maturity.

In: Accounting

Minden Company introduced a new product last year for which it is trying to find an...

Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $99 per unit, and variable expenses are $69 per unit. Fixed expenses are $831,600 per year. The present annual sales volume (at the $99 selling price) is 25,700 units.
Required:
1.

What is the present yearly net operating income or loss?

  

2.

What is the present break-even point in unit sales and in dollar sales?

  

3.

Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

  

4.

What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?

In: Accounting

If Net Investment = 0 in a given year, this indicates that we have neither lost...

If Net Investment = 0 in a given year, this indicates that we have neither lost nor gained capital. That seems to be a desirable outcome. Do you agree?

Nominal GDP rose by more than $1 trillion between 2015 and 2016. We can therefore be sure that the economy expanded. Critically evaluate.

In: Economics

You are set to receive an annual payment of $11,000 per year for the next 16...

You are set to receive an annual payment of $11,000 per year for the next 16 years. Assume the interest rate is 5.9 percent. How much more are the payments worth if they are received at the beginning of the year rather than the end of the year?

In: Finance

Louis files as a single taxpayer. In April of this year he received a $1,260 refund...

Louis files as a single taxpayer. In April of this year he received a $1,260 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $6,350. (Leave no answer blank. Enter zero if applicable.)

a. Last year Louis claimed itemized deductions of $6,466. Louis’s itemized deductions included state income taxes paid of $2,140.
Refund to be included:

b. Last year Louis had itemized deductions of $4,220 and he chose to claim the standard deduction. Louis’s itemized deductions included state income taxes paid of $2,140.

Refund to be included:

c. Last year Louis claimed itemized deductions of $8,230. Louis’s itemized deductions included state income taxes paid of $3,830.

Refund to be included:

In: Accounting

Foto Company makes 14,000 units per year of a part it uses in the products it...

Foto Company makes 14,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows:

Direct materials $ 13.60
Direct labor 21.20
Variable manufacturing overhead 3.40
Fixed manufacturing overhead 11.30
Unit product cost $ 49.50

An outside supplier has offered to sell the company all of these parts it needs for $42.70 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $32,200 per year.

If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $6.00 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.

Required:

a. How much of the unit product cost of $49.50 is relevant in the decision of whether to make or buy the part? (Round "Per Unit" to 2 decimal places.)

b. What is the financial advantage (disadvantage) of purchasing the part rather than making it?

In: Accounting