This case uses both the income statement (consolidated statement of earnings) and the balance sheet of Starbucks

Question:

This case uses both the income statement (consolidated statement of earnings) and the balance sheet of Starbucks Corporation. Visit www.pearsonhighered.com/Horngren to view a link to the Starbucks Corporation Fiscal 2011 Annual Report.

Requirements

1. What was value of the company’s inventory at October 2, 2011, and October 3, 2010?

2. Review Note 4 (specifically Inventories) in the Notes to Consolidated Financial Statements. What do Starbucks’ inventories consist of?

3. What was the amount of Starbucks’ cost of goods sold (cost of sales) for the year ending October 2, 2011, and the year ending October 3, 2010?

4. What income statement format does Starbucks use? Explain.

5. Compute Starbucks’ gross profit percentage for the year ending October 2, 2011, and the year ending October 3, 2010. Did the gross profit percentage improve, worsen, or hold steady? Assuming the industry average for gross profit percentage is 56.83%, how does Starbucks compare to the industry?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...