Shareowners' Equity at Campbell Soup: How can Equity be Negative?

Mary Beth Mohrman and Pamela S. Stuerke

Accounting Education, 2014, vol. 23, issue 4, 386-405

Abstract: This paper presents an instructional case based on the 2001 annual report of the Campbell Soup Company (CPB). During that year, CPB's shareowners' equity went from a surplus of USD137 million to a deficit of USD247 million. The analysis will allow students to determine that the change resulted from borrowing to purchase treasury stock. Students are asked to consider why CPB's lenders allowed the firm to purchase so much treasury stock with borrowed funds. The case provides an opportunity for students to improve their understanding of the impact of shareowners' equity transactions on the entire balance sheet, and to examine the effect of unreported and under-reported assets on financial statement information.

Date: 2014
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DOI: 10.1080/09639284.2014.910814

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