Shown on the next page are comparative income statements for McDonald's for 2007, 2008, and 2009. 1.

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Shown on the next page are comparative income statements for McDonald's for 2007, 2008, and 2009.

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 & paper

Less: Payroll & employee benefits

Less: Occupancy & 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 2007-2009.

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 franchise operations?

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

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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