Decision Case: 7-1

1. At the end of 2010, the balance in Kraft Foods, Inc’s Allowance for Doubtful Accounts will be = $246

At the end of 2009, the balance in Kraft Foods, Inc’s Allowance for Doubtful Accounts will be = $121

2. At the end of 2010, the balance in Kraft Foods, Inc’s Net Realizable Value will be = $ (6539 -246)

= $ 6293

At the end of 2009, the balance in Kraft Foods, Inc’s Allowance for Doubtful Accounts will be

= $ (5197 -121)

= $ 5076

3. In comparison to 2009, the provision for questionable accounts appears to have increased for the
year 2010.

This is mostly due to the fact that Kraft Foods appears to have given its consumers more goods or
services on credit than they have yet to pay for. Since another year has passed, the company's chances
of collecting the receivables have decreased; as a result, they have increased the amount set aside for
questionable accounts to roughly indicate their allowance.

A Net rise in the account simply means that the corporation has anticipated a higher amount that they
would be unable to recover from its customers.

Decision Case 7-3

1.For the company of General Mills in the year 2010, Accounts receivable turnover ratio

= Net or Gross sales/ Average accounts receivable

= $ 14,796.5/$ 1041.6

= 14.20

For the company of Kellogg’s in the year 2010, Accounts receivable turnover ratio

= Net or Gross sales/ Average accounts receivable

= $ 12,397/$ 1190

= 10.417
2. For the company of General Mills in the year 2010, Average length of time it takes to collect the
accounts receivables

= (Average accounts receivable/ Net or Gross sales) *365

= ($1041.6/$ 14,796.5) * 365

= 25.69

For the company of Kellogg’s in the year 2010, Average length of time it takes to collect the accounts
receivables

= (Average accounts receivable/ Net or Gross sales) *365

= ($1190/$12397) *365

= 35.036

3. For the Accounts Receivable turnover ratio,

We can observe that General Mills has a higher value than Kellogg’s’. It indicates that General
Mills is delaying the collection of its accounts receivable from its clients. It may also indicate that clients
are delaying their remittances and that there is a problem with the business itself. It's also possible that
those in charge of collecting accounts receivable aren't acting appropriately enough to lower the
outstanding balance.

For Average length of time, it takes to collect the accounts receivables,

We can observe that Kellogg's worth is higher than General Mills'. This indicates that Kellogg's
collects their receivables from the client more slowly than General Mills.

Additionally, Kellogg's has had more than 30 days to pay, so it should pursue collections vigorously and
enforce strict rules on its clients. Otherwise, it might find that it can't afford to cover its own bills.
Decision Case: 8-1

1. General Mills records Land, Buildings and Equipment in the Property and Equipment category.

2. The straight-line depreciation is used to depreciate the operating assets.

3. Estimated Useful life is “an estimate of the average number of years an asset is considered
useable before its value is fully depreciated.”

4. Accumulated Depreciation of Property, values and equipment for the most recent year is $
3822.0 million

5. There is an increase in the Property and Equipment asset value in the most recent fiscal year and
there seems to be a decrease in the total asset value.