1. The Annual Report of Tom Hagman’s Coffee Company Ltd. contained the following statements: “Throughout the fiscal year, the Company continued to experience declining store sales in its stores, primarily due to lower customer traffic. The Company believes that the weaker traffic has been caused by several ongoing factors in the global economy. These factors include higher cost of such basic consumer staples as gas and food, rising levels of unemployment and personal debt, reduced access to consumer credit, and lower home values as well as increased foreclosure activity in certain areas of the country.” (Adapted from the 2008 annual report of Starbuck’s Coffee Company).

Explain why a company selling coffee beverages, would include such detailed information about the current state of the economy in its annual report.

2. Maleki Enterprises Ltd. follows ASPE and states in its financial statement notes: “The company and its subsidiaries have long-term leases expiring on various dates after December 31, 2023. Amounts payable under such commitments, without reduction for related rental income, are expected to average approximately $6,711,000 annually for the next three years. Related rental income from certain subleases to others is estimated to average $3,094,000 annually for the next three years.”

What information is provided by this note?

Answer rating: 100% (QA)

1 A company selling coffee beverages like Tom Hagmans Coffee Company Ltd might include detailed information about the current state of the economy in its annual report for several reasons i Transparen... View the full answer