Refine Assumptions for Dividend and Retained Earnings 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 retained earnings for the fiscal year ended April 2020. Forecasted net income to Medtronic shareholders for fiscal 2020 $4,908 million Dividends to Medtronic shareholders in fiscal 2019 2,693 million Forecasted retained earnings $Answer million b. Suppose the MD&A section of the Form 10-K and additional guidance from the company reveals the following additional information. “Ordinary cash dividends declared and paid totaled 50.0 cents per share for each quarter of fiscal year 2019.” At year end April 26, 2019, the company had 1,340,697,595 shares issued and outstanding. Use this information to refine your forecast of retained earnings for the fiscal year ended April 2020.

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Chapter9: Long-term Liabilities
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Refine Assumptions for Dividend and Retained Earnings 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 retained earnings for the fiscal year ended April 2020.
Forecasted net income to Medtronic shareholders for fiscal 2020 $4,908 million
Dividends to Medtronic shareholders in fiscal 2019 2,693 million

Forecasted retained earnings $Answer million

b. Suppose the MD&A section of the Form 10-K and additional guidance from the company reveals the following additional information. “Ordinary cash dividends declared and paid totaled 50.0 cents per share for each quarter of fiscal year 2019.”
At year end April 26, 2019, the company had 1,340,697,595 shares issued and outstanding. Use this information to refine your forecast of retained earnings for the fiscal year ended April 2020. 


 
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