P&G Questions MidTerm

P&G Questions MidTerm - 1 of 5 Procter and Gamble...

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1 of 5 Procter and Gamble Company [Cash Flow, LIFO-FIFO, Taxes] 20923 (Dollars in millions except per share amounts) Enclosed are the income statements, the balance sheets and selected notes to the statements for the years 1992-1994. Late in fiscal year 1994, P & G acquired Revlon, Inc's worldwide Max Factor lines for $1.031 billion, cash. At the time of acquisition, Max Factor had the following amounts for certain items in the balance sheet: Accounts receivable 44 Deferred Income taxes (asset) 8 Accounts payable 92 Post retirement healthcare and life insurance benefits (liab 10 All other assets and liabilities 154 Depreciation and depletion in 1994 1045 Amortization of goodwill in 1994 89 All the currency translation adjustments are for inventories. [When the value of inventories held abroad increases due to currency exchange rate gains, the company will increase the value of the inventories and increase the account in the balance sheet] A. [The changes in all balance sheet items from 1993 to 1994 are given next to the balance sheet] B. Compute the following ratios (for the year ending June 30, 1994) [The averages of selected balance sheet items from 1993 to 1994 are given in the balance sheet] B1 Return on equity B5 Average interest rate B2 B6 Book value of equity per share on June 30 1994. B3 Return on assets (after tax) B7 Operating margin B4 Average debt to equity B8 Total asset turnover C. inventories. F To answer the questions about inventories, assume that the FIFO inventory values approximate the current cost values. the LIFO methods partially, for inventories. C1 Suppose Procter & Gamble used the FIFO method for accounting for all its inventories. What would be the effect on the net income for the year ending June 30, 1994? C2
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This note was uploaded on 03/09/2011 for the course ACTG 516 taught by Professor Staff during the Fall '08 term at Ill. Chicago.

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P&G Questions MidTerm - 1 of 5 Procter and Gamble...

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