a) Compute Campbell Soup’s working capital at end year 11

Working capital diperlukan agar perusahaan dapat beroperasi secara efektif dalam operating cycle-nya. Mengelola working capital diperlukan untuk menyeimbangkan antara profitability dengan risiko likuiditas.

b) Campbell Soup reports net receivables totaling over $527 million. To whom has it extended credit and how much bad debt reserve is provided against these receivables? What percentage of total receivables is considered uncollectible?

ACCOUNTS RECEIVABLEYear 11

Customers $ 478.00 Allowance for cash Discount& Bad Debts $ (16.30)

$ 461.70 Other $ 65.70

$ 527.40

c) What cost flow assumption does Campbell Soup use for inventories? What is its inventory write-down policy?

INVENTORIESYear 11 Year 10

Raw Materials, Containers and Supplies $ 342.30 $ 384.40 Finished Products $ 454.00 $ 520.00

$ 796.30 $ 904.40 Less - Adjustments of Inventories to LIFO $ 89.60 $ 84.60 Basis $ 706.70 $ 819.80

“Substantially all domestic inventories are priced at the lower of cost or market, with cost determined by the last in, first out (LIFO) method. Other inventories are priced at the lower of average cost or market”

di-adjust krn awalnya menggunakan FIFO

d) The inventory turnover ratio (cost of good sold/average inventory) is a measure of inventory management efficiency and effectiveness. Compute the inventory ratio for

Campbell Soup and comment on ways that it might improve the ratio

Artinya: perputaran dr mempunyai inventory sampai terjual dalam 1 th sebesar 5.37 kali atau dpt dikatakan bahwa 1 putaran = 365/5.37 = 68 hari Semakin besar rasio berarti perputaran makin cepat (semakin baik)

e) How much is the LIFO reserve for Campbell Soup? What are the total tax benefit realized by Campbell Soup as of the end fiscal year 11 because it chose the LIFO

inventory cost flow assumption (assume a 35% tax rate)

INVENTORIESYear 11 Year 10

Raw Materials, Containers and Supplies $ 342.30 $ 384.40 Finished Products $ 454.00 $ 520.00

$ 796.30 $ 904.40 Less - Adjustments of Inventories to LIFO $ 89.60 $ 84.60 Basis $ 706.70 $ 819.80

LIFO profit lebih kecil tax benefit makin besar

f) What would Campbell Soup’s pretax income have been in year 11 if it had chosen FIFO?

INVENTORIESYear 11 Year 10

Raw Materials, Containers and Supplies $ 342.30 $ 384.40 Finished Products $ 454.00 $ 520.00

$ 796.30 $ 904.40 Less - Adjustments of Inventories to LIFO $ 89.60 $ 84.60 Basis $ 706.70 $ 819.80