60.1K

Verified Solution

Link Copied!

Deer & Co is a leading manufacturer of construction equipment, engines, gas turbines and diesel-electric locomotives. [Deer & Co] also provides financing and related services through its Financial Products segment. Deer & Cos 2021 10-K. Answer problems I through IV using the attached financial statements and selected footnotes from Deer & Co's 2021 Annual Report (pages 9-11). Before answering the questions, take a few minutes to review the financial statements and footnotes. Familiarity with the available information will likely save you some time and mistakes. All amounts reported are in millions of dollars ($000,000). Fiscal year 2021 means the year ended December 31, 2021.

At the end of 2021, Deer & Co realized that its 2021 financial statements contained a number of omissions. Ignore tax effects.

1. On December 21, 2021, Deer & Co delivered a shipment of construction equipment to an independent dealer in Seoul. The dealer paid Deer & Co $40 and agreed to pay an additional $200 within ninety days after delivery. The construction equipment cost Deer & Co $180 to produce. Based on historical experience, Deer & Co estimates that 2% of such credit sales will not be collected. No entry was made to record this transaction.

If this transaction had been properly recorded in fiscal year 2021, what would be the reported amounts (not just the effect) for:

a) Total current assets as of December 31, 2021?

b) Total liabilities as of December 31, 2021?

c) Profit for the year ended December 31, 2021?

Income Statement

n

Balance Sheet

(") rroint atributavie to common snarenoiders See accompanying notes to Consolidated Financial Statements Consolidated Financial Position at December 31 (Dollars in millions) \begin{tabular}{ll} 2021 & 2020 \\ \hline \end{tabular} Assets Current assets: Cash and cash equivalents Receivables - trade and other Receivables - finance Prepaid expenses and other current assets Inventories Total current assets Property, plant and equipment - net Long-term receivables - trade and other Long-term receivables - finance Deferred income taxes Intangible assets Goodwill Other assets Total assets Liabilities Current liabilities: Short-term borrowings: Machinery, Energy \& Transportation Financial Products Accounts payable Accrued expenses Accrued wages, salaries and employee benefits Customer advances Dividends payable Other current liabilities $9,2549,352 Long-term debt due within one year: Machinery, Energy \& Transportation Financial Products Total current liabilities Long-term debt due after one year: Machinery, Energy \& Transportation Financial Products Liability for postemployment benefits Other liabilities Total liabilities Commitments and contingencies (Notes 21 and 22) \begin{tabular}{rr} 45 & 1,420 \\ 6,307 & 7,729 \\ \hline 29,847 & 25,717 \end{tabular} Shareholders' equity Common stock of $1.00 par value: Authorized shares: 2,000,000,000 Issued shares: (2021 and 2020-814,894,624 shares) at paid-in amount Treasury stock: (2021 - 279,006,573 shares; and 2020 269,590,777 shares) at cost Profit employed in the business (*) Accumulated other comprehensive income (loss) Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity \begin{tabular}{cc} \hline \hline(27,643) & (25,178) \\ 39,282 & 35,167 \\ (1,553) & (888) \\ \hline 32 & 47 \\ \hline 16,516 & 15,378 \\ \hline$82.793 & $78.324 \\ \hline \end{tabular} See accompanying notes to Consolidated Financial Statements

Answer & Explanation Solved by verified expert

See Answer