Find the financial statements of Starbucks for the year ended October 2, 2011, and look at foot-note 1. Depreciation and amortization expense was $523.3 million for the year ended October 2, 2011, according to the Consolidated Statement of Earnings.
1. What lives does Starbucks use for depreciating and amortizing its property, plant, and equipment and its intangible assets?
2. Suppose Starbucks extended the lives of all its depreciable assets by 50% so depreciation was smaller each year. Estimate the effect of this on net earnings reported in the year 2011. Assume that the average tax rate in the current income statement applied to this change in depreciation and that depreciation for financial reporting purposes was the same as that for tax purposes.

  • CreatedFebruary 20, 2015
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