b. Calculate the ratio of the depreciation and amortization expense for 2017 reported in the Consolidated Statements of Cash Flows, Supplemental Financial Statement Data to the total cost (not net book value) of property plant, and equipment reported in the schedule. (Round your percentage answer to 1 decimal place. (eg 32.6)) Answer is complete but not entirely correct. Ratio 3.3 % c. Based on the ratio calculated in part b and the depreciation method being used by Campbell's, what is the average useful life being used for its depreciation calculation? (Round your answer to 1 decimal place.) Answer is complete but not entirely correct. Average useful life 30 3 years d. Assume that the use of an accelerated depreciation method for 2017 would have resulted in 25% more depreciation and amortization than reported by Campbell's at July 30, 2017. By what percentage would this have reduced the retained earnings amount reported at July 30, 2017? (Round your percentage answer to 1 decimal place. (eg 32.6)) Answer is complete but not entirely correct. Reduction in retained earnings 0.3 CAMPBELL SOUP COMPANY Consolidated Statements of Cash Flows (millions) 2017 2016 2015 $ 887 $ 5635 666 212 18 60 141 31 64 317 308 (30) 102 57 118 303 318 93 18 (49) 15 28 46 (27) (48) (5) 59 9 15 12 (18) 10 30 (5) (53) 1.291 44 (58) 1.491 (52) 1.206 (338) Cash flows from operating activities: Net earnings .... Adjustments to reconcile net eamings to operating cash flow Impaiment charges Restructuring charges Stock-based compensation Pension and postretirement benefit expense (income) Depreciation and amortization Deferred income taxes Other, net Changes in working capital, net of acquisitions Accounts receivable Inventories Prepaid assets Accounts payable and accrued liabilities Pension fund contributions Net receipts from hedging activities Other Net cash provided by operating activities Cash flows from investing activities: Purchases of plant assets Sales of plant assets Business acquired, net of cash acquired Othernet Net cash used in investing activities Cash flows from financing activities: Net short-term borrowings (repayments) Long-term borrowings Long-term repayments Repayments of notes payable. Dividends paid Treasury stock purchases Treasury stock issuances Contributions from noncontrolling interest Payments related to tax withholding for stock-based compensation. Othernet Net cash used in financing activities Effect of exchange rate changes on cash Net change in cash and cash equivalents Cash and cash equivalents-beginning of period Cash and cash equivalents -- end of period See accompanying Notes to Consolidated Financial Statements (341) 5 (380) 15 (232) ( (603) (30) (368) (18) (354) (762) 215 100 300 245 211 (90) (400) (309) (394) (390) (437) 2 1 (21) (911) 11 23 296 319 $ (1,099) 5 43 253 296 $ 9 (18) (3) (550) (32) 21 232 253 CAMPBELL SOCP COMPANY Consolidated States of En (millies, except per herunt) 5.181 3130 483 SI Come and powe Cost of producto Marketing and selling expe Research and developespennes Other expenses/come) Restructuring charge Totalcorts and expres Earnings before interest and tases 501 117 14 15 7001 1.400 7093 1,054 30 3 115 5 Earns before times 349 406 666 S 666 5 305 309 312 Les Nereaming oss) unable to cooling interests Net earnings attributable to Campbell Smp Company Per re-Baske Net earnings tablets Campbell Smp Company Weighted areascutite ---Base Per Share-Auming to Nel caragialbutable to Campbell Seep Company Weighted weape shares outstanding in die Se necompanyar Yates to Consolidated Fiancial Statements. 5 1:31 213 313 CAMPBELL SOUP COMPANY Conseite Balance Shes (milias escopper share Curvatavat Casach Accounts receivable, 1.900 45 1.905 Others Terre Plantes et of depec Goodwill Other pillet Others (551 ms of 2017 and 534 ms of 2016 butable to warble sty) 139 107 604 686 561 111 20 Shorttemberg Payable to applies and the Acerbis Dividends payable Accuela Total currenties Long-temebe Defende Other labels Total Cermits and coatings Campbell Soup Company sharbolders' equity Premed stock authorized och sed Capital stock. 5.0375 par valued 560 med 23 shes Additional and in capital 490 6.01 6104 1.066) 6643 (1040 17637 Capital stock inte Accumulated ser comprese lom Total Campbell Soup Compass shareholders' equity Nicolage Totalquil Totes and equity See accompanying Notes to Created Financial State 1.545 1533 Answer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report Straight-line method Double declining method Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. b. Calculate the ratio of the depreciation and amortization expense for 2017 reported in the Consolidated Statements of Cash Flows, Supplemental Financial Statement Data to the total cost (not net book value) of property.plant and equipment reported in the schedule. (Round your percentage answer to 1 decimal place. (eg 32.6)) Answer is complete but not entirely correct. 3.3 % Ratio CAMPBELL SOCP COMPANY Consolidated States of En (millies, except per she must) Net Come and expenses Cost of products sold Marketing and sellinge S181 3130 9 134 Research and development experies Other expenses/come) Restructuring charges 501 117 14 15 31 7001 Earnings before interest and tases 1.400 7003 10 30 3 115 5 Earns before times 349 286 406 666 S 666 Nerg Less Neteaming (os) unable to cooling interests Net earnings attributable to Campbell Smp Company Per Baske Net earnings attributable to Campbell Soup Company Weighted mage shares outstanding --- Batec Per Share-Auming to 5 305 09 5 213 313 311 Weighted tape shares outils de See .companya Mutes to Consolidated Fiancial Statements. CAMPBELL SOUP COMPANY Censeite Balance Shes wills, escopper share Curatat Cash and catch Accounts receivable, 3195 1.980 Others Terre Plantes et of depec Goodwill Other pillet Others (551ms of 2017 and 534 ms of 2016 butable to bles) 2.1 11 139 666 501 111 100 2.49 490 09 6104 Shorttemberg Payable to applies and others Acredible Dividende payable Accecom Total current is Long-term debe Defende Othelbes Total Com a coatingrecies Campbell Soup Company sharbaders' equity Premed stock authorized che non ad Capital stock. 5.0375 par valorized 560, ed 323 shes Additional and captal Eisted in the Capital stock intrycos Acculated ser comprave low Total Campbell Soup Compass shareholders' equity Nicolage Totally Totes and equity See accompanying Notes to Created Financial State (1.066) 6543 (104 153 17637 1.545 1533 CAMPBELL SOUP COMPANY Consolidated Statements of Cash Flows (millions) 2017 2016 2015 887 $ 5635 666 212 18 60 141 31 64 317 308 (30) 6 6 102 57 118 303 (49) 15 318 93 18 28 46 (27) (48) 59 9 15 12 (18) 10 30 (5) 2 (53) 1.291 (58) 1.491 (52 1.206 Cash flows from operating activities: Net earnings... Adjustments to reconcile net eamings to operating cash flow Impaiment charges Restructuring charges Stock-based compensation Pension and postretirement benefit expense (income) Depreciation and amortization Deferred income taxes Other, net Changes in working capital, net of acquisitions Accounts receivable Inventories Prepaid assets Accounts payable and accrued liabilities Pension fund contributions Net receipts from hedging activities Other Net cash provided by operating activities Cash flows from investing activities: Purchases of plant assets Sales of plant assets Business acquired, net of cash acquired Othernet Net cash used in investing activities Cash flows from financing activities: Net short-term borrowings (repayments) Long-term borrowings Long-term repayments. Repayments of notes payable. Dividends paid Treasury stock purchases Treasury stock issuances Contributions from noncontrolling interest Payments related to tax withholding for stock-based compensation Othernet Net cash used in financing activities Effect of exchange rate changes on cash Net change in cash and cash equivalents Cash and cash equivalents-beginning of period Cash and cash equivalents -- end of period (338) (341) 5 (380) 15 (232) (30) (365) (18) (354) (603) 245 211 (90) (762) 215 100 300 (309) (394) (390) (143) 2 2 (21) (911) (1,099) 5 9 9 (18) (3) (550) (32) 21 232 253 296 319 $ 253 296 $ s CAMPBELL SOUP COMPANY Consolidated Statements of Cash Flows (millions) 2017 2015 $ 887 5635 666 212 18 60 (258) 318 93 18 141 31 64 317 308 (30) 6 102 57 118 303 (49) 15 28 46 59 9 15 2) (48) (5) 2 (53) 1.291 12 (18) 10 30 (3) 11 (52) 1.206 (58) 1.491 Cash flows from operating activities: Net earnings.... Adjustments to reconcile net eamings to operating cash flow Impairment charges Restructuring charges Stock-based compensation Pension and postretirement benefit expense (income) Depreciation and amortization Deferred income taxes Othernet Changes in working capital, net of acquisitions Accounts receivable Inventories Prepaid assets Accounts payable and accrued liabilities Pension fund contributions Net receipts from hedging activities Other Net cash provided by operating activities Cash flows from investing activities: Purchases of plant assets Sales of plant assets Business acquired, net of cash acquired Othernet Net cash used in investing activities Cash flows from financing activities: Net short-term borrowings (repayments) Long-term borrowings Long-term repayments. Repayments of notes payable Dividends paid. Treasury stock purchases. Treasury stock issuances Contributions from noncontrolling interest Payments related to tax withholding for stock-based compensation Othernet Net cash used in financing activities Effect of exchange rate changes on cash Net change in cash and cash equivalents Cash and cash equivalents-beginning of period Cash and cash equivalents - end of period (338) (341) 5 (380) 15 (232) (6) (603) (30) (368) (18) (354) (762) 215 100 300 245 211 (90) (100) (420) (390) (143) (309) (394) (244) 2 9 (22) (21) (1,099) 5 (911) 1 23 296 319 $ (18) (3) (550) (32) 21 232 253 253 296 $ $ See accompanying Notes to Consolidated Financial Statements Balance Sheets 2017 2016 Accounts receivable Customer accounts receivable Allowances. Subtotal Other 561 S (11) 550 $ 55 566 (12) 554 72 $ 605 $ 626 Inventories Raw materials, containers and supplies Finished products. 377 $ 525 902 $ 391 549 940 Other current assets Fair value of derivatives Other 9 $ 65 74 S 5 41 46 Plant assets Land Buildings Machinery and equipment Projects in progress Total cost Accumulated depreciation" 64 $ 1,553 4,231 195 6,043 $ (3,589) 2,454 $ 58 1.488 4,042 176 5,764 (3.357) 2,407 $ 47 Other assets Investments. Deferred taxes Other 41 69 $ 36 34 139 $ 19 107 Accrued liabilities Accrued compensation and benefits Fair value of derivatives. 263 241 $ 43 16 47 Other assets Investments. Deferred taxes Other. 41 69 $ 36 34 139 $ 19 107 241 $ Accrued liabilities Accrued compensation and benefits. Fair value of derivatives. Accrued trade and consumer promotion programs Accrued interest Restructuring Other... 131 34 24 SS 561 $ 263 16 130 35 57 103 604 501 Other liabilities Pension benefits Deferred compensation Postretirement benefits Fair value of derivatives Unrecognized tax benefits Restructuring Other. 261 96 247 1 34 2 56 6975 100 285 44 31 17 61 1,039 (1) Depreciation expense was $299 in 2017, $288 in 2016 and $286 in 2015. Buildings are depreciated over periods ranging from 7 to 45 years. Machinery and equipment are depreciated over periods generally ranging from 2 to 20 years. The deferred compensation obligation represents unfunded plans maintained for the purpose of providing our directors and certain of our executives the opportunity to defer a portion of their compensation. All forms of compensation contributed to the deferred compensation plans are accounted for in accordance with the underlying program. Deferrals and our contributions are credited to an investment account in the participant's name, although no funds are actually contributed to the investment account and no investments are actually purchased. Seven investment choices are available, including: (1) a book account that tracks the total return on our stock, (2) a book account that tracks the performance of the Vanguard Institutional Index (3) a book account that tracks the performance of the Vanguard Extended Market Index; (4) a book account that tracks the performance of the Vanguard Total International Stock Index: (5) a book account that tracks the performance of the Vanguard Total Bond Market Index: (6) a book account that tracks the performance of the Vanguard Short-Term Bond Index, and (7) a book account that tracks the BlackRock Short-Term Investment Fund. Participants can reallocate investments daily and are entitled to the gains and losses on investment funds. We recognize an amount in the Consolidated Statements of Eamings for the market appreciation/depreciation of each fund. CAMPBELL SOUP COMPANY Consolidated Statements of Earnings (millions, except per share amounts) 2017 2016 2015 $ 7,890 $ 7,961 $ 8,082 5.300 884 601 117 24 4,831 817 488 98 238 18 6,490 1,400 112 5 1,293 406 Net sales Costs and expenses Cost of products sold Marketing and selling expenses. Administrative expenses Research and development expenses. Other expenses/ (income). Restructuring charges Total costs and expenses Earnings before interest and taxes Interest expense Interest income Earnings before taxes Taxes on earings Net earnings. Less: Net earnings (loss) attributable to noncontrolling interests Net earnings attributable to Campbell Soup Company Per Share - Basic Net earnings attributable to Campbell Soup Company Weighted average shares outstanding -- basic Per Share - Assuming Dilution Net earnings attributable to Campbell Soup Company Weighted average shares outstanding - assuming dilution See accompanying Notes to Consolidated Financial Statements. 5,181 893 641 124 131 31 7,001 960 115 4 849 102 7,028 1,054 108 3 949 286 283 887 563 666 S 887 $ 563 666 2.91 $ 2.13 1.82 $ 309 305 312 2.89 $ 1.81 $ 2.13 307 311 313 CAMPBELL SOUP COMPANY Consolidated Balance Sheets (millions, except per share amounts) July 30, 2017 July 31, 2016 319 $ 605 902 74 1,900 2,454 2,115 1.118 139 7,726 $ 296 626 940 46 1.908 2.407 2.263 1,152 107 7,837 $ 1.219 610 604 Current assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets. Plant assets, net of depreciation Goodwill Other intangible assets, net of amortization Other assets ($51 as of 2017 and $34 as of 2016 attributable to variable interest entity) Total assets Current liabilities Short-term borrowings Payable to suppliers and others Accrued liabilities Dividends payable Accrued income taxes Total current liabilities. Long-term debt Deferred taxes. Other liabilities Total liabilities... Commitments and contingencies Campbell Soup Company shareholders' equity Preferred stock, authorized 40 shares, none issued Capital stock, 5.0375 par value, authorized 560 shares; issued 323 shares. Additional paid-in capital Earnings retained in the business Capital stock in treasury, at cost. Accumulated other comprehensive loss... Total Campbell Soup Company shareholders' equity Noncontrolling interests Total equity Total liabilities and equity 1,037 $ 666 561 111 20 2,395 2,499 490 697 100 22 2,555 2.314 396 1.039 6.304 6,081 12 359 2,385 (1,066) (53) 1,637 8 1,645 7,726 $ 12 354 1.927 (664) (104) 1.525 8 1,533 7.837