Problem 7-1 (60 minutes)

WORKSHEET TO COMPUTE CASH FLOW FROM OPERATIONS (IN MILLIONS)

DIRECT (INFLOW-OUTFLOW) PRESENTATION
CAMPBELL SOUP YEAR ENDED JULY 28, YEAR 11
Ref. Reported Adjust. Revised
Cash Receipts from Operations
Net Sales ......................................................... 13 $6,204.1 $7.5 $6,211.6
Other revenue and income ............................... 19 26.0 C 26.0
(I) D in current receivables ............................... 61 17.1 C 17.1
(I) D in noncurrent receivables .........................
= CASH COLLECTIONS ................................ $6,247.2 $7.5 $6,254.7

Cash Disbursements for Operations

Total expenses (include min. int. & taxes) a $5,831.0 $7.5 $5,838.5
Less: Expenses & losses not using cash:
- Depreciation and amortization ....................... 57 (208.6) (208.6)
- Noncurrent deferred income taxes ................. 59 (35.5) (35.5)
- Other, net....................................................... 60 (63.2) (63.2)

Change in Current Assets and Liabilities

related to Operations
I (D) in inventories .......................................... 62 $ (48.7) $ (48.7)
I (D) in prepaid expenses ............................... 35 (25.3) (25.3)
(I) D in accounts payable ............................... 41 42.8 42.8
(I) D in taxes payable ..................................... 44 (21.3) (21.3)
(I) D in accruals, payrolls, etc. b ...................... 175 (26.8) (26.8)
I or D in noncurrent accounts c ....................... 5.8 0.0 5.8
= CASH DISBURSEMENTS ............................ $5,450.2 $7.5 $5,457.7

Dividends Received
Equity in income of
unconsolidated affiliates ................................. 24 2.4 2.4
Distributions beyond equity
in income of affiliates c ................................... 5.8 0.0 5.8
= Dividends from unconsol. affiliates ................ 169A $ 8.2 $0.0 $ 8.2
CASH FLOW FROM OPERATIONS ............... $ 805.2 $0.0 $ 805.2

a
Total costs and expenses [22A] + Taxes on earnings [27] + Minority interests [25] + Interest
income [19] = $5,531.9 + $265.9 + $7.2 + $26.0 = $5,831
b
It is assumed that accruals, payrolls, etc., are part of item [175].
c
A reconciling amount to tie in with the $8.2 dividends from affiliates (item 169A) versus
equity in earnings of affiliates (item 24).