1. Refer to the FY2016 income statement and balance sheet for General Mills, Inc. (GMI), along with the forecasted FY2017 income statement that you computed in the last exercise. Use that information and the following assumptions to forecast the GMI balance sheet for FY2017.

• Unless noted in other assumptions, all assets and liabilities as a percentage of FY2017 sales remain unchanged.
• Depreciation expense for FY2016 is $580.1 million.
• FY2016 capital expenditure (CAPEX) is $729.3 million, and its land, buildings, and equipment in FY2015 total $3,783.3 million.
• Goodwill remains unchanged.
• The cash flow statement reports that amortization expense for each of the next 5 years is estimated to be $28 million.
• Notes payable remains unchanged.
• Long-term debt footnotes reveal that principal payments due on long-term debt in the next 5 years are: $1,103.4 million in FY2017, $604.7 million in FY2018, $1,150.4 million in FY2019, $1,056.0 million in FY2020, and $555.9 million in FY2021.
• Stock repurchases will be $300 million in FY2017.
• Dividends in FY2016 are $1,071.7 million and will not change in FY2017 as a percentage of net earnings attributable to GMI.

2. The FY2016 income statement and balance sheet for General Mills, a competitor of P&G, follow. Use them
3. to answer the required questions.
4. Refer to the FY2016 income statement and balance sheet for General Mills along with the forecasted
5. FY2017 income statement in Reviews

2. Use the following assumptions to forecast the GMI income statement for FY2017.

• Net sales will decrease by 1.5% (150 basis points) in FY 2017.
• Because of ongoing restructuring and efficiency improvement measures, operating expenses as a percentage of net sales will be lower than in FY2016, as follows:
  • Cost of sales: 200 basis points lower.
  • Selling, general, and administrative (SGA) expenses: 50 basis points lower.
• No announced divestitures for FY2017.
• Restructuring, impairment, and other exit costs will be half the dollar amount reported in FY2016.
• Tax expense as a percentage of pretax income will remain unchanged.
• The following line items remain unchanged in dollar terms:
  • Interest, net.
  • After-tax earnings from joint ventures.
  • Net earnings attributable to redeemable and noncontrolling interests.
  • 

Forecasted FY 2017

Analytical Foundation of Business Financial Accounting Exercise 8: Forecasting the Balance Sheet GENERAL MILLS INC. Consolidated Statements of Earnings $ millions Net sales... Cost of sales. Selling, general, and administrative expenses.. Divestitures (gain)...... Restructuring, impairment, and other exit costs Operating profit. Interest, net .. Earnings before income taxes and after-tax earnings from joint ventures. Income taxes After-tax earnings from joint ventures Net earnings, including earnings attributable to redeemable and noncontrolling interests Net earnings attributable to redeemable and noncontrolling interests Net earnings attributable to General Mills. 12 Months Ended May 29, 2016 $16,563.1 10,733.6 3,118.9 (148.2) 151.4 2,707.4 303.8 2,403.6 755.2 88.4 1,736.8 39.4 $ 1,697.4 Analytical Foundation of Business Financial Accounting Exercise 8: Forecasting the Balance Sheet GENERAL MILLS INC. Consolidated Balance Sheet $ millions, except par value Total current assets... Land, buildings, and equipment. Goodwill........ Other intangible assets. Other assets... Total assets.. $ millions, except par value Current liabilities Accounts payable. Current portion of long-term debt Notes payable.... Other current liabilities Total current liabilities. Long-term debt Deferred income taxes.. Other liabilities Total liabilities. Redeemable interest value... Stockholders' equity Common stock, 754.6 shares issued, $0.10 par value Additional paid-in capital.... Retained earnings Common stock in treasury, at cost Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests.. Total equity... Total liabilities and equity. May 29, 2016 3,937.2 3,743.6 8,741.2 4,538.6 751.7 $21,712.3 May 29, 2016 $ 2,046.5 1,103.4 269.8 1,595.0 5,014.7 7,057.7 1,399.6 2,087.6 15,559.6 845.6 75.5 1,177.0 12,616.5 (6,326.6) (2,612.2) 4,930.2 376.9 5,307.1 $21,712.3 GENERAL MILLS INC. Consolidated Statements of Earnings 12 months Ended May 29, 2016 $ 16,563.10 10,733.60 $ $ 3,118.90 148.20 151.40 2,707.40 303.80 2,403.60 755.20 88.40 1,736.80 39.40 1,697.40 $ Millions Net sales....... Cost of Sales... Selling, general, and administrative expenses... Divestitures (gain)...... Restructuring, impairment, and other exit costs. Operating profit. Interest, net... | Earnings before income taxes and after-tax earnings from joint ventures.. Income taxes.... After-tax earnings from joint ventures.. Net Earnings, including earnings attributable to redeemable and noncontrolling interests.. Net Earnings attributable to redeemable and noncontrolling interests. Net Earnings attributable toGeneral Mills.. -$ $ $ $ $ $ $ % of net sales/pretax income 64.8% 18.8% 31.4% Forecasted 12 months Ended May 29, 2017 $ $ 16,314.65 10,246.30 2,990.50 75.70 3,002.10 303.80 2,698.30 847.80 88.40 1,938.90 39.40 1,899.50 $ $ $ $ $ $ $ $ $ $ % of net sales/pretax income 62.8% 18.3% 31.4% Analytical Foundation of Business Financial Accounting Exercise 8: Forecasting the Balance Sheet GENERAL MILLS INC. Consolidated Statements of Earnings $ millions Net sales... Cost of sales. Selling, general, and administrative expenses.. Divestitures (gain)...... Restructuring, impairment, and other exit costs Operating profit. Interest, net .. Earnings before income taxes and after-tax earnings from joint ventures. Income taxes After-tax earnings from joint ventures Net earnings, including earnings attributable to redeemable and noncontrolling interests Net earnings attributable to redeemable and noncontrolling interests Net earnings attributable to General Mills. 12 Months Ended May 29, 2016 $16,563.1 10,733.6 3,118.9 (148.2) 151.4 2,707.4 303.8 2,403.6 755.2 88.4 1,736.8 39.4 $ 1,697.4 Analytical Foundation of Business Financial Accounting Exercise 8: Forecasting the Balance Sheet GENERAL MILLS INC. Consolidated Balance Sheet $ millions, except par value Total current assets... Land, buildings, and equipment. Goodwill........ Other intangible assets. Other assets... Total assets.. $ millions, except par value Current liabilities Accounts payable. Current portion of long-term debt Notes payable.... Other current liabilities Total current liabilities. Long-term debt Deferred income taxes.. Other liabilities Total liabilities. Redeemable interest value... Stockholders' equity Common stock, 754.6 shares issued, $0.10 par value Additional paid-in capital.... Retained earnings Common stock in treasury, at cost Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests.. Total equity... Total liabilities and equity. May 29, 2016 3,937.2 3,743.6 8,741.2 4,538.6 751.7 $21,712.3 May 29, 2016 $ 2,046.5 1,103.4 269.8 1,595.0 5,014.7 7,057.7 1,399.6 2,087.6 15,559.6 845.6 75.5 1,177.0 12,616.5 (6,326.6) (2,612.2) 4,930.2 376.9 5,307.1 $21,712.3 GENERAL MILLS INC. Consolidated Statements of Earnings 12 months Ended May 29, 2016 $ 16,563.10 10,733.60 $ $ 3,118.90 148.20 151.40 2,707.40 303.80 2,403.60 755.20 88.40 1,736.80 39.40 1,697.40 $ Millions Net sales....... Cost of Sales... Selling, general, and administrative expenses... Divestitures (gain)...... Restructuring, impairment, and other exit costs. Operating profit. Interest, net... | Earnings before income taxes and after-tax earnings from joint ventures.. Income taxes.... After-tax earnings from joint ventures.. Net Earnings, including earnings attributable to redeemable and noncontrolling interests.. Net Earnings attributable to redeemable and noncontrolling interests. Net Earnings attributable toGeneral Mills.. -$ $ $ $ $ $ $ % of net sales/pretax income 64.8% 18.8% 31.4% Forecasted 12 months Ended May 29, 2017 $ $ 16,314.65 10,246.30 2,990.50 75.70 3,002.10 303.80 2,698.30 847.80 88.40 1,938.90 39.40 1,899.50 $ $ $ $ $ $ $ $ $ $ % of net sales/pretax income 62.8% 18.3% 31.4%