Interpreting Footnotes on Security Investments Cisco Systems Inc. reports the fo

Question

Interpreting Footnotes on Security Investments
Cisco Systems Inc. reports the following information derived from its 2016 10-K report. (Note: Cisco’s 2016 disclosures are consistent with the former accounting rules for marketable equity securities. See the Accounting Insight box on page 9-6 in the textbook.)

Summary of Available-for-Sale Investments
The following table summarizes the Company's available-for-sale investments (in millions).

a. What is the amount of Cisco’s investment portfolio on its balance sheet?
$Answer million

b. What does the number $112 represent in the “Accumulated Other Comprehensive Income” column?

The amount represents an unrealized loss on trading securities that resulted from a decrease in their value during the year.

The amount represents an unrealized loss on available for sale securities that resulted from a decrease in their value during the year.

The amount represents an unrealized gain on trading securities that resulted from an increase in their value during the year.

The amount represents an unrealized gain on available for sale securities that resulted from an increase in their value during the year.

c. Compute comprehensive income for 2015.
$Answer million

Accumulated Common Stock Other Total Cisco's Shares of and Additional Retained Comprehensive Shareholders' Noncontrolling $ millions Common Stock Paid in Capital Earnings Income (Loss) Equity Interests Total Equity Balance at July 25, 2015 5,085 $43,592 $16,045 $61 $59,698 $9 $59,707 Net income 10,938 10,938 10,938 Change in: Unrealized gains and (losses) on investments, net 112 112 (10) 102 Derivative instruments (43) (43) (43) Cumulative translation adjustment and other (480) (480) (480) Other comprehensive income (loss) (411) (411) (10) (421) Issuance of common stock 113 1,127 1,127 1,127 Repurchase of common stock (148) (1,280) (2,638) (3,918) (3,918) Repurchase of common stock for tax withholdings on vesting of restricted stock units (21) (557) (557) (557) Cash dividends declared (4,750) (4,750) (4,750) Tax effects from employee stock incentive plans 30 30 30 Share-based compensation 1,458 1,458 1,458 Purchase acquisitions 146 146 146 Balance at July 30, 2016 $5,029 $44,516 $19,595 $(350) $63,761 $(1) $63,760

Explanation / Answer

a. What is the amount of Cisco’s investment portfolio on its balance sheet? $58,375.00 Million Cisco’s 2016 balance sheet reports the investment portfolio at the current market value of$58,375 million, which does include unrealized gains and losses. b. What does the number $112 represent in the “Accumulated Other Comprehensive Income” column? The amount represents an unrealized loss on trading securities that resulted from a decrease in their value during the year. The amount represents an unrealized loss on available for sale securities that resulted from a decrease in their value during the year. The amount represents an unrealized gain on trading securities that resulted from an increase in their value during the year. The amount represents an unrealized gain on available for sale securities that resulted from an increase in their value during the year. The $112 million is the unrealized gain on securities that arose during 2016 because stock prices increased during the year c. Compute comprehensive income for 2015. Net Income $10,938.00 Add OCI $61.00 comprehensive income for 2015 $10,999.00 million

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.