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Forecast the Income Statement, Balance Sheet, and Statement of Cash Flows Following are fiscal year financial statements of Costco. COSTCO WHOLESALE CORP Consolidated Statements of

Forecast the Income Statement, Balance Sheet, and Statement of Cash Flows Following are fiscal year financial statements of Costco.

COSTCO WHOLESALE CORP

Consolidated Statements of Income

For Year Ended ($ millions) Sep. 1, 2019 Sep. 2, 2018

Net sales $164,286 $152,277
Membership fees 3,687 3,456
Total revenue 167,973 155,733
Merchandise costs 146,175 135,467
Selling, general and administrative 16,493 15,264
Preopening expenses 95 75
Operating income 5,210 4,927
Interest expense (165) (175)
Interest income and other, net 196 133
Income before income taxes 5,241 4,885
Provision for income taxes 1,167 1,389
Net income including noncontrolling interests 4,074 3,496
Net income attributable to noncontrolling interests (50) (50)
Net income attributable to Costco $4,024 $3,446

COSTCO WHOLESALE CORP

Consolidated Balance Sheet

For Year Ended ($ millions) Sep. 1, 2019 Sep. 2, 2018

Current Assets
Cash and cash equivalents $9,221 $6,660
Short-term investments 1,166 1,324
Receivables, net 1,689 1,836
Merchandise inventories 12,535 12,144
Other current assets 1,222 353
Total current assets 25,833 22,317
Property and Equipment
Land 7,059 6,812
Buildings and improvements 18,850 17,718
Equipment and fixtures 8,581 8,001
Construction in progress 1,399 1,254
Gross property and equipment 35,889 33,785
Less accumulated depreciation and amortization (12,910) (12,136)
Net property and equipment 22,979 21,649
Other assets 1,128 946
Total assets $49,940 $44,912
Current Liabilities
Accounts payable $12,847 $12,361
Accrued salaries and benefits 3,494 3,293
Accrued member rewards 1,298 1,163
Deferred membership fees 1,882 1,786
Current portion of long-term debt 1,869 99
Other current liabilities 4,171 3,216
Total current liabilities 25,561 21,918
Long-term debt, excluding current portion 5,636 7,136
Other liabilities 1,601 1,445
Total liabilities 32,798 30,499
Equity
Preferred stock $.01 par value;
100,000,000 shares authorized*
Common stock $0.01 par value;
900,000,000 shares authorized** 4 4
Additional paid-in capital 7,059 6,718
Accumulated other comprehensive loss (1,580) (1,319)
Retained earnings 11,284 8,676
Total Costco stockholders' equity 16,767 14,079
Noncontrolling interests 375 334
Total equity 17,142 14,413
Total liabilities and equity $49,940 $44,912

Required Forecast Costcos income statement, balance sheet, and statement of cash flows for the year ended September 1, 2020. Combine all property and equipment accounts into Net property and equipment. Forecasts assumptions Forecast Net sales and Membership fees using their respective historical growth rates (2018 to 2019). Forecast the following as a percentage of Net sales: Merchandise costs Receivables, net Merchandise inventories Accounts payable Accrued member rewards Forecast income tax as 23% of pretax income Forecast Deferred membership fees as a percentage of Membership fees. Assume no change in the balance of the following: Preopening expenses Interest expense Interest income Net income attributable to noncontrolling interest Short-term investments Preferred stock Common stock Accumulated other comprehensive loss Debt maturing in fiscal 2020 and 2021 is $1,869 million and $1,203 million, respectively. The company anticipates repurchasing $275 million in common stock in fiscal 2020. The 2019 statement of cash flows reports the following: Depreciation expense of $1,641 million Dividends of $1,142 million (to forecast 2020 dividends, use the 2019 dividend payout ratio as a percentage of net income attributable to Costco shareholders) Stock-based compensation (a noncash expense that is included in SG&A expense and is added to Additional paid-in capital) of $655 million CAPEX of $3,298 million Forecast all other items as a percentage of total revenues. Note: Round historical rates used in calculations to three decimal places. For example, assume that Actual Merchandise inventories divided Actual Net sales equals 0.076297. This factor should be rounded to 7.6% before computing your forecasted amount for Merchandise inventories. Note: Round your final answers below to the nearest whole dollar.

COSTCO WHOLESALE CORP

Forecasted Income Statement

For the year ended

$ millions Sep. 01, 2020

Forecast

Net sales Answer
Membership fees Answer
Total revenues Answer
Expenses
Merchandise cost Answer
Selling, general and administrative Answer
Preopening expenses Answer
Operating income Answer
Interest expense Answer
Interest income and other, net Answer
Income before income taxes Answer
Provision for income taxes Answer
Net income including noncontrolling interests Answer
Net income attributable to noncontrolling Answer
Net income attributable to Costco Answer

COSTCO WHOLESALE CORP

Balance Sheet

$ millions Sep. 01, 2020

Forecast

Cash and cash equivalents Answer
Short-term investments Answer
Receivables, net Answer
Merchandise inventories Answer
Other current assets Answer
Total current assets Answer
Net property and equipment Answer
Other assets Answer
Total assets Answer
Accounts payable Answer
Accrued salaries and benefits Answer
Accrued member rewards Answer
Deferred memberships fees Answer
Current portion of long-term debt Answer
Other current liabilities Answer
Total current liabilities Answer
Long term debt, excluding current portion Answer
Other liabilities Answer
Total liabilities Answer
Preferred stock Answer
Common stock Answer
Additional paid-in capital Answer
Accumulated other comprehensive loss Answer
Retained earnings Answer
Treasury stock Answer
Total Costco stockholders' equity Answer
Noncontrolling interests Answer
Total equity Answer
Total liabilities and equity Answer

COSTCO WHOLESALE CORP

Forecasted Statement of Cash Flow

For the year ended

$ millions Sep. 01, 2020

Forecast

Net income including noncontrolling interests Answer
Add: Depreciation Answer
Add: Stock-based compensation Answer
Receivables, net Answer
Merchandise inventories Answer
Other current assets Answer
Other assets Answer
Accounts payable Answer
Accrued salaries and benefits Answer
Accrued member rewards Answer
Deferred membership fees Answer
Other current liabilities Answer
Other liabilities Answer
Net cash from operating activities Answer
Capital Expenditures Answer
Net cash from investing activities Answer
Dividends Answer
Change in current maturities of L-T debt Answer
Change in L-T Debt Answer
Stock repurchases Answer
Net cash from financing activities Answer
Net change in cash Answer
Beginning cash Answer
Ending cash Answer

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