Interpreting Footnotes on Security Investments Cisco Systems Inc. reports the following information derived from its...
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Interpreting Footnotes on Security Investments Cisco Systems Inc. reports the following information derived from its 2016 10-K report. (Note: Ciscos 2016 disclosures are consistent with the former accounting rules for marketable equity securities. See the Accounting Insight box on page 9-6 in the textbook.)
Accumulated
Common Stock
Other
Total Cisco's
Shares of
and Additional
Retained
Comprehensive
Shareholders'
Noncontrolling
$ millions
Common Stock
Paid in Capital
Earnings
Income (Loss)
Equity
Interests
Total Equity
Balance at July 25, 2015
5,085
$43,592
$16,045
$61
$59,698
$9
$59,707
Net income
10,938
10,938
10,938
Change in:
Unrealized gains and (losses) on investments, net
112
112
(10)
102
Derivative instruments
(43)
(43)
(43)
Cumulative translation adjustment and other
(480)
(480)
(480)
Other comprehensive income (loss)
(411)
(411)
(10)
(421)
Issuance of common stock
113
1,127
1,127
1,127
Repurchase of common stock
(148)
(1,280)
(2,638)
(3,918)
(3,918)
Repurchase of common stock for tax withholdings on vesting of restricted stock units
(21)
(557)
(557)
(557)
Cash dividends declared
(4,750)
(4,750)
(4,750)
Tax effects from employee stock incentive plans
30
30
30
Share-based compensation
1,458
1,458
1,458
Purchase acquisitions
146
146
146
Balance at July 30, 2016
$5,029
$44,516
$19,595
$(350)
$63,761
$(1)
$63,760
Summary of Available-for-Sale Investments The following table summarizes the Company's available-for-sale investments (in millions).
Gross
Gross
Amortized
Unrealized
Unrealized
July 30, 2016
Cost
Gains
Losses
Fair Value
Fixed income securities
U.S. government securities
$26,714
$82
$(2)
$26,794
U.S. government agency securities
2,809
8
-
2,817
Non-U.S. government and agency securities
1,096
4
-
1,100
Corporate debt securities
24,044
263
(15)
24,292
U.S. agency mortgage-backed securities
1,846
22
-
1,868
Total fixed income securities
$56,509
379
(17)
$56,871
Publicly traded equity securities
1,211
333
(40)
1,504
Total
$57,720
$712
$(57)
$58,375
a. What is the amount of Ciscos investment portfolio on its balance sheet? $Answer million b. What does the number $112 represent in the Accumulated Other Comprehensive Income column?
The amount represents an unrealized loss on trading securities that resulted from a decrease in their value during the year.
The amount represents an unrealized loss on available for sale securities that resulted from a decrease in their value during the year.
The amount represents an unrealized gain on trading securities that resulted from an increase in their value during the year.
The amount represents an unrealized gain on available for sale securities that resulted from an increase in their value during the year.
c. Compute comprehensive income for 2015. $Answer million
Answer & Explanation
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