Kodak Refer to the following financial statements for Kodak: CASE 9-1 Forecasting Pro Forma Financial Statements Table of Contents INCOME STATEMENT 20x6 20x5 20x4 For Year Ended December 31 (in millions) $13,234 8,670 $13,994 8,375 5,619 2,665 $14,089 8,086 Net sales Cost of goods sold . Gross profit...... .. 4,564 6,003 2,846 Selling, general, and administrative expenses Research and development costs Restructuring costs (credits) and other Earnings from operations Interest expense.. Other income (charges) . Earnings before income taxes Provision for income taxes. 2,781 779 784 817 659 345 (44) 2,214 350 1,990 219 178 142 (18) 96 261 108 2,132 2,109 32 725 717 Net earnings 1,407 1,392 76 BALANCE SHEET 20x6 20x5 At December 31 (in millions, except share and per share data) Assets Current assets $ 448 $ 246 Cash and cash equivalents Receivables, net. 2.337 2,653 Inventories, net 1.137 1,718 575 Deferred income taxes 521 Other current assets 240 299 Total current assets 5,491 4,683 Property,plant, and equipment, net Goodwill, net....... Other long-term assets 5,659 5.919 948 947 2,072 1,855 Total assets.... . $13.362 $14,212 Liabilities and shareholders' equity Current liabilities Accounts payable and other current liabilities Short-term borrowings.. Current portion of long-term debt Accrued income taxes..... $ 3,276 1,378 $ 3,403 2,058 156 148 544 606 Total current liabilities... 6,215 5,354 Long-term debt, net of current portion 1,666 1,166 Postemployment liabilities Other long-term liabilities. 2,728 2,722 720 681 10,784 Total liabilities 10.468 Shareholders' equity Common stock, $2.50 par value 950,000,000 shares authorized: issued 391,292,760shares in 20x6 and 20x5; 290,929,701 and 290,484,266 shares outstanding in 20x6 and 20x5 Additional paid in capital. Retained earnings.. . 978 978 849 871 7,431 7.869 Accumulated other comprehensive loss (597) (482) 8,661 (5,767) 9.236 (5,808) Treasury stock, at cost; 100,363,059 shares in 20x6 and 100,808.494 shares in 20x5 .... Total shareholders' equity.... 2,894 3,428 Total liabilities and shareholders' equity $13,362 $14,212 Required Prepare forecasts of its income statement, balance sheet, and statement of cash flows for 20x7 under the following assumptions: Kodak will not record restructuring.costs for 20x7. c. Taxes payable are at the 20x6 level of $544 million. d Depreciation expense charged to SG&A is $765 million and $738 million for 20x6 and 20x5, respectively Projected current maturitiesf lon or2x and 20x5, respectively g. Capital expenditures for 20x6 and 20x5 are $1,047 and $783, respectively. Kodak Refer to the following financial statements for Kodak: CASE 9-1 Forecasting Pro Forma Financial Statements Table of Contents INCOME STATEMENT 20x6 20x5 20x4 For Year Ended December 31 (in millions) $13,234 8,670 $13,994 8,375 5,619 2,665 $14,089 8,086 Net sales Cost of goods sold . Gross profit...... .. 4,564 6,003 2,846 Selling, general, and administrative expenses Research and development costs Restructuring costs (credits) and other Earnings from operations Interest expense.. Other income (charges) . Earnings before income taxes Provision for income taxes. 2,781 779 784 817 659 345 (44) 2,214 350 1,990 219 178 142 (18) 96 261 108 2,132 2,109 32 725 717 Net earnings 1,407 1,392 76 BALANCE SHEET 20x6 20x5 At December 31 (in millions, except share and per share data) Assets Current assets $ 448 $ 246 Cash and cash equivalents Receivables, net. 2.337 2,653 Inventories, net 1.137 1,718 575 Deferred income taxes 521 Other current assets 240 299 Total current assets 5,491 4,683 Property,plant, and equipment, net Goodwill, net....... Other long-term assets 5,659 5.919 948 947 2,072 1,855 Total assets.... . $13.362 $14,212 Liabilities and shareholders' equity Current liabilities Accounts payable and other current liabilities Short-term borrowings.. Current portion of long-term debt Accrued income taxes..... $ 3,276 1,378 $ 3,403 2,058 156 148 544 606 Total current liabilities... 6,215 5,354 Long-term debt, net of current portion 1,666 1,166 Postemployment liabilities Other long-term liabilities. 2,728 2,722 720 681 10,784 Total liabilities 10.468 Shareholders' equity Common stock, $2.50 par value 950,000,000 shares authorized: issued 391,292,760shares in 20x6 and 20x5; 290,929,701 and 290,484,266 shares outstanding in 20x6 and 20x5 Additional paid in capital. Retained earnings.. . 978 978 849 871 7,431 7.869 Accumulated other comprehensive loss (597) (482) 8,661 (5,767) 9.236 (5,808) Treasury stock, at cost; 100,363,059 shares in 20x6 and 100,808.494 shares in 20x5 .... Total shareholders' equity.... 2,894 3,428 Total liabilities and shareholders' equity $13,362 $14,212 Required Prepare forecasts of its income statement, balance sheet, and statement of cash flows for 20x7 under the following assumptions: Kodak will not record restructuring.costs for 20x7. c. Taxes payable are at the 20x6 level of $544 million. d Depreciation expense charged to SG&A is $765 million and $738 million for 20x6 and 20x5, respectively Projected current maturitiesf lon or2x and 20x5, respectively g. Capital expenditures for 20x6 and 20x5 are $1,047 and $783, respectively