Question: Financial statements often serve as a starting point in formulating budgets. Review Research In Motion's financial statements to determine its cash paid for acquisitions of property, plant and equipment in the current year and the budgeted cash needed for such acquisitions in the next year.
Required: 1. Which financial statement reports the amount of cash paid for acquisitions of property, plant, and equipment? Explain where on the statement this information is reported.
2. Indicate the amount of cash (a) paid for acquisitions of property, plant, and equipment in the year ended February 27, 2010, and (b) to be paid (budgeted for) next year under the assumption that annual acquisitions of property, plant and equipment equal 60% of the prior year's net income.
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3. Access Research In Motion's financial statements for a year ending after February 27, 2010, from either its Website [RIM.com] or the SEC's EDGAR database [www.sec.gov]. Compare your answer for part 2 with actual cash paid for acquisitions of property, plant and equipment for that fiscal year. Compute the error, if any, in your estimate. Speculate as to why cash paid for acquisitions of property, plant and equipment was higher or lower than your estimate.