B6001 – Accounting 1 – Financial Accounting
SOLUTION TO PROBLEM SET 2
Question 1: General Mills 2022
a) Total assets are $31,090.1 and total shareholders’ equity is $10,542.4 ($10,788.0 with
non-controlling interests included). Equity is less than total assets because various
non-owners (including, for example, lenders, vendors and tax authorities) also have
claims against the company’s assets. These claims are shown as liabilities on the
balance sheet. Liabilities plus shareholder’s equity equal total assets.
b) The asset with the largest balance is goodwill, carried at $14,378.5 as of the end of
fiscal year 2022. Whether the company has other, more valuable resources is unclear
for two reasons. First, balance sheet amounts are determined according to accounting
rules and do not necessarily reflect current fair market values. Second, not all
resources meet the definition of an asset under accounting rules, and so the balance
sheet is an incomplete list of economic resources.
c) Cash and cash equivalents decreased by $935.8 during fiscal year 2022, from
$1,505.2 to $569.4. This information can be found on the balance sheet and on the
statement of cash flows.
d) Net income is $2,707.3 ($2,735.0 with redeemable and noncontrolling interests
included). The amount is shown on the income statement (called statement of
earnings in the case of General Mills) and on the statement of changes in owners’
equity (called statements of total equity and redeemable interest in the case of
General Mills). In addition, the cash flow statement contains $2,735.0, net income
with redeemable and noncontrolling interests included.
e) Retained earnings increased by $1,462.8 during fiscal year 2022, from $17,069.8 to
$18,532.6. This information can be found both on the balance sheet and on the
statement of shareholders’ equity.
You may only share these materials with current term students.
SOLUTION TO PROBLEM SET 2
Question 1: General Mills 2022
a) Total assets are $31,090.1 and total shareholders’ equity is $10,542.4 ($10,788.0 with
non-controlling interests included). Equity is less than total assets because various
non-owners (including, for example, lenders, vendors and tax authorities) also have
claims against the company’s assets. These claims are shown as liabilities on the
balance sheet. Liabilities plus shareholder’s equity equal total assets.
b) The asset with the largest balance is goodwill, carried at $14,378.5 as of the end of
fiscal year 2022. Whether the company has other, more valuable resources is unclear
for two reasons. First, balance sheet amounts are determined according to accounting
rules and do not necessarily reflect current fair market values. Second, not all
resources meet the definition of an asset under accounting rules, and so the balance
sheet is an incomplete list of economic resources.
c) Cash and cash equivalents decreased by $935.8 during fiscal year 2022, from
$1,505.2 to $569.4. This information can be found on the balance sheet and on the
statement of cash flows.
d) Net income is $2,707.3 ($2,735.0 with redeemable and noncontrolling interests
included). The amount is shown on the income statement (called statement of
earnings in the case of General Mills) and on the statement of changes in owners’
equity (called statements of total equity and redeemable interest in the case of
General Mills). In addition, the cash flow statement contains $2,735.0, net income
with redeemable and noncontrolling interests included.
e) Retained earnings increased by $1,462.8 during fiscal year 2022, from $17,069.8 to
$18,532.6. This information can be found both on the balance sheet and on the
statement of shareholders’ equity.
You may only share these materials with current term students.
