ACCT 302 THE FINANCIAL REPORTING CASE (FRC)

ACCT 302

THE FINANCIAL REPORTING CASE         __Walgreen co._____________________________

Spring 2011

 Name of the company (PRINT)

Last Name________________________________

First Name________________________________ Section No.: ______

IMPORTANT:   

a.   ALL answers must be fitted, using blue ink, in the spaces provided and on the line(s)

drawn for each question.

b.   Your ability to understand and follow the instructions herein is a factor in grading your

work.

c.   The report neatness and legibility have 10% of the points for the report.

d.   Your primary source should be the form 10-K for your company.

A. General Information (4 points) 

1.   The company’s fiscal year ends on what date?

___August 31^st ___________

Address of the Company’s Headquarter: __ 200 Wilmot Road, Deerfield, Illinois. Zip code: 60015.__________________

Nature of the Company’s business:

Walgreen Co. together with its subsidiaries operates the largest drugstore chain in the United States.  They provide their customers with convenient, multichannel access to consumer goods and services, and pharmacy, health and wellness services in communities across America.  They offer their products and services through drugstores, as well as through mail, by telephone, and via the Internet.

Basically they sell prescription and non-prescription drugs as well as general merchandise, including household products, convenience foods, personal care, beauty care, candy, photofinishing and seasonal items. Their pharmacy services includes retail, specialty, infusion, medical facility, long- term care and mail service, along with pharmacy benefit solutions and respiratory services.

_________________________________________________________________________

What is the company’s standard industry classification? (Give both)

Standard Industry Name: RETAIL-DRUG STORES AND PROPRIETARY STORES

Standard Industry Code (4-digits):           5912

Page 1-6

B. Investments (6 points)

1.   What is (are) the classification(s) and amount of any investment in securities reported in the

company’s Financial Statements and/or the Notes attached thereto (i.e. Trading Securities, Available-for-

sale, etc., as covered in the Investments chapter of the textbook)?

Classification  

______________________________________

______________________________________

______________________________________

______________________________________

Amount

________________

________________

________________

________________

2.  Where are the unrealized gains or losses from investments in available-for-sale securities

reported? (Mark with X)

In the shareholders’ equity section

In the footnotes

What is the amount?

_______________

_______________

_______________

3.  Which methods of accounting are used for the above investments in securities? List.

_____________________________________________

_____________________________________________

_____________________________________________

_____________________________________________

C.) Liabilities (6 points)

1.   What are the total liabilities reported on the balance sheet?

_$11,875,000,000_____________

2.    Calculate the debt to total assets ratio for (use the formula from your textbook):

Last Year___0.45________       Current Year ____0.43______

3.   What is the industry average debt/total assets ratio for the current year?           0.4_______

(The industry averages are available in the Reference Section of the library; ask attendants

for referral.  Use the SIC you gave in part “A” to find the average.)

ACCT 302—Spring 2011

Page 2-6

D. Leases (6 points)

1.   From the disclosure notes, determine:

Types of leases (based on the Chapter on Leases)

___________________________________  

___________________________________  

___________________________________  

Amount of the

lease obligation, if any.         

____________________

____________________

____________________

2.    What did the company report as its future minimum annual rental commitments under

non-cancellable leases?

________________

E.  Stockholders’ Equity (8 points)

1.  At the end of the year, how many shares of common stock did the company have in the following categories?

Authorized

Issued

Outstanding

2.  What is the par value per share of the common stock?

3. Does the company have any treasury stock?  Yes  /  No (circle one); if yes:

How many shares?

What is the amount?

______________

______________

_ 929,744,049 _____________

____ $0.0625 __________

______________

$______________

4.  Did the company split its stock in the current year?

If yes, in what ratio?

ACCT 302—Spring 2011

Yes  /  No   (circle one) No

______________

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F.  Compensations (10 points)

1.  From the proxy statement filed with the SEC, what was the total annual monetary compensation paid to

the company’s Chief Executive Officer? (Salary plus cash bonuses)

______________

2.  From the disclosure notes, find the following pension information for the current year:

Type of pension plan (Defined Benefit or Defined Contribution, or both):

___________________________________________________________________________

Cash contributions made into the plan by the company    ___________________________

The balance of Projected Benefit Obligation (PBO)          ___________________________

The interest rate used in estimating the PBO

What is the year-end funded status of the company?

Circle one:

and

Show the amount:

3.   Does the company have any stock compensation plans?

Yes  /  No (circle one);  if yes:

a.  What are the types of plans?  List

___________________

Over-funded/Under-funded,

____________________________