Base your answers to the following problems on the 2009 financial statements of Carnival Corporation & PLC in Exhibit 1-10. Carnival Corporation is a global cruise company combining Carnival Corporation, which is incorporated in Panama, and Carnival PLC, which is incorporated in England and Wales. It operates several cruise lines, including Carnival Cruises, Holland America, and Princess Cruises, that offer cruises in Europe, North America, and Australia.

In Exhibit 1-10
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)

The accompanying notes are an integral part of these consolidated financial statements
a. Find the following amounts in the statements:
i. Total revenues in 2009
ii. Total operating expenses in 2009
iii. Depreciation and amortization in 2008
iv. Income tax expense in 2008
v. Net income in 2009
vi. Inventories at the beginning of 2009
vii. Accounts receivable at the end of 2008
viii. Retained earnings at the end of 2009
ix. Total long-term debt at the end of 2009
x. Cash flows from operating activities in 2009
xi. Cash payments to acquire property and equipment in 2008
xii. Dividends paid in 2009
xiii. Cash produced or used for investing activities in 2009
b. Did Carnival Corporation finance its business primarily from creditors (total liabilities) or from shareholders (shareholders' equity) in 2009? Support your answer with appro­priate calculations.
c. List the two largest sources of cash and the two largest uses of cash in 2009. (Consider operating activities to be a single source or use of cash.)
d. Carnival Corporation prepared a classified balance sheet. Calculate the difference between the current assets and current liabilities at the end of 2009, and at the end of 2008. This amount is referred to as working capital. Did the company's working capital improve in 2009? Explain.
e. Carnival Corporation operates several cruise lines. When customers book cruises, they usually pay for the cruise several weeks or months before the cruise occurs. Because the cruise has not yet happened, Carnival does not record the payment as revenue. Instead it recognizes its obligation by recording the payment as a liability. Find this liability on the company's balance sheet. What is it called? What are the amounts for 2009 and 2008?

Transcribed Image Text:

Years Ended November 30 2009 2008 2007 Revenues Cruise Passenger tickets . 2,885 3,044 2,846 Onboard and other*. Other.. 13,157 14,646 13,033 Costs and Expenses Operating Cruise 1,941 495 1,336 1,096 747 1,717 1,917 Commissions, transportation and other Onboard and other Payroll and related Fuel Food. 461 ,498 1,156 2,232 501 1,470 1,774 856 1,913 839 Other 9,039 1,629 1,249 11,917 7,628 1,579 1,101 8,104 1,590 Total.. Selling and administrative.. Depreciation and amortization. 10 2,154 2.729 25 Operating Income. Nonoperating (Expense) Income 35 (414) 27 352) Interest income 14 67 18 348 1,806 Other income (expense), net Income Before Income Taxes.... Income Tax Expense, Net Net Income Earnings Per Share 301 2,424 2,377 1647) 16) 1.790 2330 2,408 $ 227 S 296 S 304 Basic S 224 902.95 S 1.60 1.375 Diluted Dividends Declared Per Share ..