Accouting questions about kellogs annual report 44.Kellogg’s retained earnings b
ID: 2489010 • Letter: A
Question
Accouting questions about kellogs annual report
44.Kellogg’s retained earnings balance is lower at the end of 2014 than at the end of the previous year? What is the main explanation for this?
45. (A) How much cash was generated by Kellogg’s from issuing stock in the 2014 fiscal year?
(B) How much cash was used to repurchase shares of stock in the 2013 fiscal year?
46. How does Kellogg’s account for its research and development costs?
47. How did the adoption of the new accounting standard issued by the FASB in July 2013, effect Kellogg’s financial statements
48. How much of the acquisition cost of Pringle’s was allocated to Goodwill?
49. How much was Kellogg’s authorized to pay out in order to repurchase its stock up until the start of 2016?
50. What was Kellogg’s times interest earned ratio for the year ended 1-3-15?
here is thel link to the annual report: http://s1.q4cdn.com/765937029/files/doc_financials/annual_reports/K_2014-Annual-Report_v001_q725z5.pdf
Explanation / Answer
Ans 44 The main reason from decrease in retained earnings is more dividend is declared that the net income earned in 2014. Dividend declared=$680 and Net Income=$632 so decrease in retained earnings $48 million and there is also stock options exercised and others for ($12) million. But the main reason is dividend declared.
Ans 45 ans a Net issuance of commom stock in 2014=$217 million
ans b Common stock repurchase in 2013= ($544) million
Ans 46 Research and development cost for 2014 was $199 million. These expenses are classified under SGA expenses.The R & D cost of the company majorily includes internal wages, salaries , consultation, supplies attributable to the time spent on R & D activities.It also includes depreciation and maintanence of researh equipment and facilities.R & D includes expenditure on new product and technological improvement to existing product.
Ans 47 There was no significant effect/impact to the Consolidated Financial Statements. The FASb issued accounting standard for presentation of unrecognized tax benefitswhen there is net operating loss carryforwards. So this standard was applied in 2014 but had no significant impact.
Ans 48 The goodwill amount was $1319 in Pringle acquistion
Ans 49 In Feb 2014 The board of directors approved a new authorization upto $1.5 billions in shares through December 2015
Ans 50 Times Interest Earned ratio= Net Opearting Income/Interest Expense=1024/209= 4.9 times rounded off