ACC 3110 Project #2 Name_____________________

For this final project, you will use the 10K for Kroger Company for the fiscal year ended February 2, 2019.

Complete this project by typing your answer into the column marked Answer. The table will expand as you type in your answer.

Question	Your Answer
1. The financial statements of the 10K start on page 35 with the Independent Auditors Report. Who were the Independent Auditors for Kroger? For how many years has PWC been the auditors?
2. What was Total Liabilities & Stockholders Equity at 2/2/2019?
3. What was net income, other comprehensive income, and comprehensive income for the year ending 2/2/2019?
4. What was the balance of AOCI at 2/2/2019? Is this due to unrecognized gains or losses?
5. What was the $ amount change in AOCI between 2/2/2019 and 2/3/2018? Does this amount agree to another number in the financial statements? Explain and be specific.
6. What does Kroger call Retained Earnings?
7. By what amount did Retained Earnings change during the most current year? Why did it change ( be specific with items and amount?
8. Does Kroger have a simple or a complex capital structure and how do you know?
9. Basic and fully diluted Earnings Per Share for the year ending 2/2/2019 are __________ and _________, respectively.
10. How were the 2/2/2019 EPS amounts calculated? Looking for specific calculations.
11. Read footnote #11. Why does the company have dilutive EPS? Did they exclude any potentially dilutive securities? (Be specific with amounts.) Why do you think the options were anti-dilutive?
12. What is the amount of J&Js income tax expense for the year ending 2/2/2019?
13. Read footnote #5 on taxes. Accounting for financial statement purposes and accounting for tax purposes result in different tax amounts. What was current taxes payable in the US?
14. What was the statutory rate in 2018 and in 2017? What was the effective tax rate in 2018 and in 2017? Why was the effective tax rate a refund in 2017?
15. As you learned in ACC 3110, deferred tax assets are due to future deductions. What was the item that is causing the largest deferred tax asset?
16. Deferred tax liabilities are due to future taxable amounts. What item is causing the largest deferred tax liability?
17. How and where are the deferred tax items presented on the financial statements? Is this consistent with what you learned in ACC 3110?
18. Did Kroger have a Valuation Allowance on their DTA? If yes, why? Indicate $ amount. What journal entry do you think they made for the year ending 2/2/2019?
19. How many shares of Common Stock are authorized at 2/2/2019? What is par value? How many shares of Common Stock are issued as of 2/2/2019? How many shares of Common Stock are outstanding at 2/2/2019? Are the amounts equalwhy or why not?
20. What was the average price that the Common Stock was issued?
21. How many shares of Preferred Stock are authorized at 2/2/2019? Are they issued?
22. Was any Treasury Stock acquired during 2018? What was the change in the treasury stock account in 2018? How much cash was used to acquire treasury stock?
23. Why was Treasury Stock Reissued during 2018?
24. What amount of total dividends was declared in 2018? What was the total cash dividends paid in 2018?
25. Kroger Company issues stock options. The company recognizes compensation expense for all share based payments granted using the fair value recognition method which is what we learned in ACC 3110. What was the weighted-average estimated fair value of each stock option in 2018? How was this amount determined? What was the expected volatility in 2018?
26. Finish the following sentence. Total compensation expense in 2018 was ___________ and this amount was added back in the ____________ Section of the Statement of Cash Flows because __________.
Review Footnote #15 in the Annual Report: 27. You should note that the benefit plan footnote is quite comprehensive and may be difficult to understand even for one who has studied accounting. The disclosure requirements for defined benefits is under review by the FASB mainly due to enhance understandability of current disclosures. With that being said, parts should resemble the pension worksheet. What was the periodic benefit cost (pension expense) for qualified plans in 2018? Are the components of pension expense consistent with our class discussion? What was the amount of the service cost component?
28. What discount rate are they using for interest?
29. The periodic benefit cost for retirement plans was reduced by the expected return on plan assets. What was the amount of this return and was it also the actual return? If not, what was the difference?
30. What rate did Kroger assume they would earn on their plan assets (investments) in 2018?
31. What is the funded status of Qualified Pension Plans at 2/2/2019? How is this calculated?
32. What would happen to pension expense if Kroger expected a higher rate of return on their plan assets?
33. In Krogers pension plan, how are the assets invested? How are the plan assets valued? What percentage of the plan assets are Level 1, Level 2, or Level 3? Is there another measurement? How does Kroger define Level 1, 2, and 3 and where is this noted? Is this consistent with what we discussed in class?
34. See footnote #20: What does Kroger say about the new lease standard? What will be the future impact on the Balance Sheet? They state that the new standard will not impact net earnings. Why is this?
35. What was the total change in 2018 between Cash & Cash Investments? Show how this reconciles with change due to operating activities, investing activities, and financing activities.
36. How did Kroger handle pension expense on the SCF? Be specific.
37. How much cash was received due to issuance of long-term debit?
38. What is free cash flow at end of 2018?
39. What was the most interesting thing you read in this annual report that you heard about in ACC 3110?