Use the 2011 Form 10-K for Snap-on Inc. to complete the requirements below. To obtain the Form 10-K, you can use the EDGAR system following the instructions in Appendix A, at the back of this text, or it can be found under “Corporate Information” on the company’s corporate website at Read carefully the following portions of the document:
■ “Products and Services” on page 5.
“Consolidated Statement of Earnings” on page 64.
The following parts of Note 1 on page 71:
• “Shipping and handling”
• “Advertising and promotion”
■ “Note 4: Inventories” on page 79.
■ “Note 5: Property and equipment” on page 79.

a. Does the level of detail that Snap-on provides regarding costs incurred to manufacture its products suggest the company’s financial statements are designed primarily to meet the needs of external or internal users?
b. Does Snap-on treat shipping and handling costs as product or period costs?
c. Does Snap-on treat advertising and promotion costs as product or period costs?
d. In the first accounting course, you learned about a class of inventory called merchandise inventory. What categories of inventory does Snap-on report in its annual report?
e. What is the cost of the land owned by Snap-on? What is the cost of its machinery and equipment?

  • CreatedFebruary 07, 2014
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