Refine Assumptions for PPE ForecastFollowing are the income statement and balance sheet for Medtronic PLC.Consolidated Statement of Income ($ millions)For Fiscal Year EndedApril 26, 2019Net sales$30,557Costs and expenses Cost of products sold9,155Research and development expenses2,330Selling, general, and administrative expense10,418Amortization of intangible assets1,764Restructuring charges, net198Certain litigation charges, net166Other operating expense, net258Operating profit (loss)6,268Other nonoperating income, net(373)Interest expense1,444Income (loss) before income taxes5,197Income tax provision547Net income (loss)4,650Net (income) loss attributable to noncontrolling interests(19)Net income (loss) attributable to Medtronic$ 4,631Consolidated Balance Sheet ($ millions)April 26, 2019Current assets Cash and cash equivalents$ 4,393Investments5,455Accounts receivable, less allowances of $1906,222Inventories, net3,753Other current assets2,144Total current assets21,967Property, plant, and equipment, net4,675Goodwill39,959Other intangible assets, net20,560Tax assets1,519Other assets1,014Total assets$89,694Current liabilities Current debt obligations$838Accounts payable1,953Accrued compensation2,189Accrued income taxes567Other accrued expenses2,925Total current liabilities8,472Long-term debt24,486Accrued compensation and retirement benefits1,651Accrued income taxes2,838Deferred tax liabilities1,278Other liabilities757Total liabilities39,482Shareholders' equity Ordinary shares0Additional paid-in capital26,532Retained earnings26,270Accumulated other comprehensive loss(2,711)Total shareholders' equity50,091Noncontrolling interests121Total equity50,212Total liabilities and shareholders' equity$89,694a. Use the financial statements along with the additional information below to forecast property, plant and equipment, net for fiscal year ended April 2020.$ millionsApril 27, 2018ActualApril 26, 2019ActualApril 2020ForecastNet sales$29,953$30,557$33,002CAPEX1,0681,134 Depreciation expense821895 Property, plant, and equipment, gross10,25910,920 Round to the nearest million.Forecasted PPE, net for FY2020 $Answer millionb. Suppose the company discloses in a press release that accompanies its year-end SEC filing that anticipated CAPEX for fiscal year ended April 2020 is $1.5 billion. Use this guidance to refine your forecast of property, plant and equipment, net for fiscal year ended April 2020.$Answer millionSave AnswersNext

Step 1 As per US GAAP , all the property , plants and equipment's should be present in the books of…

Answered: a. Use the financial statements along…

Intermediate Accounting: Reporting And Analysis

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ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

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Refine Assumptions for PPE Forecast
Following are the income statement and balance sheet for Medtronic PLC.

Consolidated Statement of Income ($ millions) For Fiscal Year Ended	April 26, 2019
Net sales	$30,557
Costs and expenses
Cost of products sold	9,155
Research and development expenses	2,330
Selling, general, and administrative expense	10,418
Amortization of intangible assets	1,764
Restructuring charges, net	198
Certain litigation charges, net	166
Other operating expense, net	258
Operating profit (loss)	6,268
Other nonoperating income, net	(373)
Interest expense	1,444
Income (loss) before income taxes	5,197
Income tax provision	547
Net income (loss)	4,650
Net (income) loss attributable to noncontrolling interests	(19)
Net income (loss) attributable to Medtronic	$ 4,631

Consolidated Balance Sheet ($ millions)	April 26, 2019
Current assets
Cash and cash equivalents	$ 4,393
Investments	5,455
Accounts receivable, less allowances of $190	6,222
Inventories, net	3,753
Other current assets	2,144
Total current assets	21,967
Property, plant, and equipment, net	4,675
Goodwill	39,959
Other intangible assets, net	20,560
Tax assets	1,519
Other assets	1,014
Total assets	$89,694
Current liabilities
Current debt obligations	$838
Accounts payable	1,953
Accrued compensation	2,189
Accrued income taxes	567
Other accrued expenses	2,925
Total current liabilities	8,472
Long-term debt	24,486
Accrued compensation and retirement benefits	1,651
Accrued income taxes	2,838
Deferred tax liabilities	1,278
Other liabilities	757
Total liabilities	39,482
Shareholders' equity
Ordinary shares	0
Additional paid-in capital	26,532
Retained earnings	26,270
Accumulated other comprehensive loss	(2,711)
Total shareholders' equity	50,091
Noncontrolling interests	121
Total equity	50,212
Total liabilities and shareholders' equity	$89,694

a. Use the financial statements along with the additional information below to forecast property, plant and equipment, net for fiscal year ended April 2020.

$ millions	April 27, 2018 Actual	April 26, 2019 Actual	April 2020 Forecast
Net sales	$29,953	$30,557	$33,002
CAPEX	1,068	1,134
Depreciation expense	821	895
Property, plant, and equipment, gross	10,259	10,920

Round to the nearest million.

Forecasted PPE, net for FY2020 $Answer million

b. Suppose the company discloses in a press release that accompanies its year-end SEC filing that anticipated CAPEX for fiscal year ended April 2020 is $1.5 billion. Use this guidance to refine your forecast of property, plant and equipment, net for fiscal year ended April 2020.

$Answer million

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