Go to www.mcdonalds.com to find the McDonald’s home page. Click on the “Corporate Info” heading under “Our Story.” Then select the “Investors” heading. Finally click on “Annual Reports” and select the most recent report.

Answer the following questions:

1. First open the balance sheet. Name two items on the McDonald’s balance sheet that most likely represent unexpired (prepaid) costs. Name two items that most likely represent accruals of unrecorded expenses.

2. Has McDonald’s grown in the past year? What did you look at to determine this?

3. Now look at McDonald’s income statement. Did the company’s sales (revenues) grow during the past year? By how much? Did its income increase or decrease? By how much? Do the sales and income changes bode well or poorly for McDonald’s future?

4. Which financial statements provide evidence that McDonald’s is a corporation, not a sole proprietorship or partnership?

5. Where can you find evidence in the McDonald’s annual report that the financial statements were prepared using GAAP?