Abbott Laboratories and Subsidiaries*    &n...

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Abbott Laboratories and Subsidiaries*
                                 (Dollars in thousands)
                                                                   December 31
                                              2008                   2007                  2006
Liabilities and Shareholders' Investment
Current Liabilities:
Short-term borrowings       $ 1,691,069      $ 1,827,361         $ 5,305,985
Trade accounts payable         1,351,436       1,219,529            1,175,590
Salaries, wages, and commissions 1,011,312    859,784            807,283
Other accrued liabilities          4,216,742       3,713,104          3,850,723
Dividends payable                   559,064            504,540               453,994
Income taxes payable             805,397             80,406               262,344
Obligation in connection with conclusion of TAP
Pharmaceutical Products, Inc. joint venture
                                                 915,982                  -                           -
Current portion of long-term debt 1,040,906    898,554                95,276
Total Current Liabilities          11,591,908         9,103,278          11,951,195
Long-term Debt                      8,713,327         9,487,789            7,009,664
Postemployment Obligations and Other Long-term
Liabilities                                 4,634,418          3,344,317          3,163,127
Commitments and Contingencies
Shareholders' Investment:
Preferred shares, one dollar par value
'Abbott Laboratories is an Illinois corporation, incorporated in 1900. Abbott's principal business is the discovery, development, manufacture, and sale of a broad and diversified line of health care products." 10-K

                                                                            December 31
                                                          2008                   2007                  2006
Liabilities and Shareholders' Investment (continued)
Authorized-1,000,000 shares, none issued
                                                                  -                     -                         -
Common shares, without par value
Authorized-2,400,000,000 shares
Issued at stated capital amount-
Shares: 2008: 1,601,580,899; 2007:
1,580,854,677; 2006: 1,550,590,438   7,444,411       6,104,102          4,290,929
Common shares held in treasury, at cost -
Shares: 2008: 49,147,968; 2007: 30,944,537;
2006: 13, 347,272                              (2,626,404)       (1,213,134)          (195,237)
Earnings employed in the business   13,825,383       10,805,809          9,568,728
Accumulated other comprehensive income (loss)
                                                          (1,163,839)         2,081,763             389,766
Total Shareholders' Investment          17,479,551       17,778,540         14,054,186
                                                          $42,419,204      $39,713,924       $36,178,172
a. 1. The statement is entitled "Consolidated Balance Sheet." What does it mean to have a consolidated balance sheet?
b. 1. What current liability decreased the most?
2. What current liability increased the most?
c. 1. How many common shares had been issued as of December 31, 2008?
2. How many shares were held in the treasury at December 31, 2008?
3. How many shares were outstanding at December 31, 2008?
4. What is the treasury stock method?
d. 1. Abbott Laboratories discloses the account "Earnings employed in the business." What is this account usually called?

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These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

1. An income statement provides information on the financial performance of a business for a certain period of time. Specifically, the income statement will show whether revenues exceeded expenses or the other way around. All of these information are usually prepared using the accrual basis of Accounting. On the other hand, a balance sheet provides information on the financial position of a business as of a point in time. In particular, the balance sheet provides information for current and non-current assets, current and non-current liabilities, and total stockholders’ equity. Similarly, a balance sheet is normally prepared under the accrual basis of Accounting.

It is imperative though that assessment of a business’ financial health should not be limited only to evaluating information from an income statement and a balance sheet. A cash flows statement will offer information about the business’ financial health that are expressed in cash – not in accrual information. This is very important because at the end of the day, certain transactions by the...

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