Shown on the next page are comparative income statements for McDonald's for 2002, 2003, and 2004. 1.

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Shown on the next page are comparative income statements for McDonald's for 2002, 2003, and 2004.

1. There are two kinds of McDonald's restaurants'restaurants that McDonald's itself owns and restaurants owned by McDonald's franchisees. For each of the three years, prepare a mini income statement for McDonald's containing the following items:

Sales by company-operated restaurants

Less: Food and paper

Less: Payroll and employee benefits

Less: Occupancy and other operating expenses

= Operating income from company-operated restaurants

2. From the mini income statements prepared in (1), prepare common-size income statements for McDonald's company-operated restaurants for the three years 2002–2004.

3. Comment on the common-size income statements prepared in (2).

4. Where does McDonald's get more of its total operating income'from company-owned restaurants or from franchiseoperations?

Shown on the next page are comparative income statements for McDonald's
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Intermediate Accounting

ISBN: 978-0324312140

16th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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