Question 5 Partially correct Mark 18.00 out of 67100 7 Flag question 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 (S millions) Sep' 1, 2019 Sep' 2, 2018 Net sales $74,676 $69,217 Membership fees 1,676 1,571 Total revenue 76,352 70,788 Merchandise costs 66,443 61,576 Selling, general and administrative 7,497 6,938 Preopening expenses 43 34 Operating income 2,369 2,240 Interest expense (75) (80) Interest income and other, net 89 61 Income before income taxes 2,383 2,221 Provision for income taxes 531 632 Net income including noncontrolling interests 1,852 1,589 Net income attributable to noncontrolling interests (23) (23) Net income attributable to Costco $1,829 $1,566 COSTCO WHOLESALE CORP Consolidated Balance Sheets In millions, except par value Sep. 1, 2019 Sep. 2, 2018 Current Assets Cash and cash equivalents ' $4,192' $3,028 Short-term investments ' 530 l 602 Receivables, net 768 835 Merchandise inventories 5,698 5,520 Other current assets ' 556 l 161 Total current assets ' 11,744 ' 10,146 Property and Equipment ' ' Land 3,209 3,097 Buildings and improvements 8,568 8,054 Equipment and xtures 3,901 3,637 Construction in progress 636 570 Gross property and equipment 16,314 15,358 Less accumulated depreciation and amortization (5,868) (5,517) Net property and equipment 10,446 9,841 Other assets 513 430 Total assets $22,703 $20,417 Current Liabilities Accounts payable $5,840 $5,619 Accrued salaries and benefits 1,588 1,497 Accrued member rewards 590 529 Deferred membership fees 856 812 Current portion of long-term debt 850 45 Other current liabilities 1,896 1,462 Total current liabilities 11,620 9,964 Long-term debt, excluding current portion 2,562 3,244 Other liabilities 728 657 Total liabilities 14,910 13,865 Equity Preferred stock $.01 par value; 100,000,000 shares authorized* Common stock $0.01 par value; 900,000,000 shares authorized** 2 2 Additional paid-in capital 3,209 3,054 Accumulated other comprehensive loss (718) (600) Retained earnings 5,129 3,944 Total Costco stockholders' equity 7,622 6,400 Noncontrolling interests 171 152 Total equity 7,793 6,552 Total liabilities and equity $22,703 $20,417 *no shares issued and outstanding ** 219,812,500 and 219,094,500 shares issued and outstanding Required Forecast Costco's 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 $850 million and $547 million, respectively. The company anticipates repurchasing $125 million in common stock in fiscal 2020. The 2019 statement of cash flows reports the following: - Depreciation expense of $746 million - Dividends of $519 million (to forecast 2020 dividends, use the 2019 dividend payout ratio as a percentage of net income attributable to Costco shareholders) - Stockbased compensation (a noncash expense that is included in SG&A expense and is added to Additional paid-in capital) of $298 million - CAPEX of $1,499 million Forecast all other items as a percentage of total revenues. Note: Round historical rates used in calculations to three decimal places. For example, round 0.04556 to 0.046 or 4.6%. Note: Round your final answers below to the nearest whole dollar. Accrued member rewards 2,045 x Deferred membership fees 913 X Other current liabilities 2,045 x Other liabilities 785 3: Net cash from operating activities 17,906 a: Capital Expenditures 1,617 a: Net cash from investing activities 1,617 x Dividends 546 3: Change in current maturities of L-T debt 0 X Change in LT Debt 125 3: Stock repurchases 0 x Net cash from financing activities 0 x Net change in cash 0 x Beginning cash 0 x Ending cash 0 x