Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 7, Problem 3ADM
Krispy Kreme and Dunkin’: Days’ cash on hand
Krispy Kreme Doughnuts, Inc. is a leading retailer and wholesaler of doughnuts. Krispy Kreme owns or franchises 1,000 stores where the “hot” light tells you if doughnuts are cooking. Dunkin’ Brands Group, Inc. is a leading franchisor of doughnut (Dunkin’ Donuts) and ice cream (Baskin-Robbins) shops with more than 19,000 stores worldwide. Selected financial statement information for a recent year for both companies follows (in thousands):
| Krispy Kreme | Dunkin’Brands | |
| Operating expenses | $442,097 | $432,535 |
| 12,840 | 19,779 | |
| Cash (end of year balance) | 50,971 | 208,080 |
- A. Determine the days’ cash on hand for each company. (Round all calculations to one decimal place.)
- B. Which company appears to have the stronger cash liquidity position?
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Krispy Kreme Doughnuts, Inc. (KKD) is a leading retailer and wholesaler of doughnuts. Krispy Kreme owns or franchises more than 1,100 stores where the “hot" light tells you if doughnuts are cooking. Dunkin* Brands Group, Inc. (DNKN) is a leading franchisor of doughnut (Dunkin' Donuts) and ice cream (Baskin-Robbins) shops with more than 20,000 stores worldwide. Selected financial statement information for a recent year for both companies follows (in thousands):
a. Determine the days' cash on hand for each company. Round all calculations to one decimal place.b. Which company appears to have the stronger cash liquidity position?
SMITH’S MARKET (SMALL BUSINESS ACCOUNTING SYSTEM)In 1989, Robert Smith opened a small fruit and vegetable market in Bethlehem,Pennsylvania. Originally, Smith sold only produce grown on his family farm andorchard. As the market’s popularity grew, however, he added bread, canned goods,fresh meats, and a limited supply of frozen goods. Today Smith’s Market is a full-rangefarmers’ market with a strong local customer base. Indeed, the market’s reputation forlow prices and high quality draws customers from other Pennsylvania cities and evenfrom the neighboring state of New Jersey. Currently Smith’s has 40 employees. Theseinclude sales staff, shelf Stockers, farm laborers, shift supervisors, and clerical staff.Recently, Smith has noticed a decline in profits and sales, while his purchases ofproducts for resale have continued to rise. Although the company does not prepareaudited financial statements, Robert Smith has commissioned your public accountingfirm to assess his company’s sales…
Smith’s Market (Small Business Cash Sales Accounting System)
In 1989 Robert Smith opened a small fruit and vegetable market in Bethlehem, Pennsylvania. Originally Smith sold only produce grown on his family farm and orchard. As the market’s popularity grew, however, he added bread, canned goods, fresh meats, and a limited supply of frozen goods. Today Smith’s Market is a full-range farmers’ market with a strong local customer base. Indeed, the market’s reputation for low prices and high quality draws customers from other Pennsylvania cities and even from the neighboring state of New Jersey. Currently Smith’s has 40 employees. These include sales staff, shelf stockers, farm laborers, shift supervisors, and clerical staff. Recently Smith has noticed a decline in profits and sales, while his purchases of products for resale have continued to rise. Although the company does not prepare audited financial statements, Robert Smith has commissioned your public accounting firm to assess his…
Chapter 7 Solutions
Financial & Managerial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Internal control elements Identify each of the...Ch. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Sarbanes-Oxley internal control report Using...Ch. 7 - Prob. 7.2EXCh. 7 - Prob. 7.3EXCh. 7 - Prob. 7.4EXCh. 7 - Prob. 7.5EXCh. 7 - Prob. 7.6EXCh. 7 - Prob. 7.7EXCh. 7 - Prob. 7.8EXCh. 7 - Prob. 7.9EXCh. 7 - Prob. 7.10EXCh. 7 - Prob. 7.11EXCh. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 7.14EXCh. 7 - Prob. 7.15EXCh. 7 - Prob. 7.16EXCh. 7 - Prob. 7.17EXCh. 7 - Prob. 7.18EXCh. 7 - Prob. 7.19EXCh. 7 - Prob. 7.20EXCh. 7 - Prob. 7.21EXCh. 7 - Prob. 7.22EXCh. 7 - Prob. 7.23EXCh. 7 - Prob. 7.24EXCh. 7 - Prob. 7.1APRCh. 7 - Prob. 7.2APRCh. 7 - Prob. 7.3APRCh. 7 - Prob. 7.4APRCh. 7 - Prob. 7.5APRCh. 7 - Prob. 7.1BPRCh. 7 - Prob. 7.2BPRCh. 7 - Prob. 7.3BPRCh. 7 - Prob. 7.4BPRCh. 7 - Prob. 7.5BPRCh. 7 - Continuing Company AnalysisAmazon: Days cash on...Ch. 7 - Apache: Days cash on hand Apache Corporation is an...Ch. 7 - Krispy Kreme and Dunkin: Days cash on hand Krispy...Ch. 7 - Nike, lululemon, and Under Armour: Days cash on...Ch. 7 - Prob. 7.1TIFCh. 7 - Communication Wholesome and Happy Foods is a...
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