close solutoin list

Analyzing Starbucks’s Inventory Disclosures Obtain Starbucks’s 2017 annual report either using the “Investor Relations” portion of its web site (do a Web search for Starbucks investor relations) or go to http://www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).” Required: 1. What is the primary cost flow assumption that Starbucks uses: Discuss how the amounts reported under this assumption compare to amounts reported under alternative cost flow assumptions. Explain why you think Starbucks selected this method. 2. What type of inventory system—perpetual or periodic—do you think Starbucks uses? 3. Does Starbucks have any purchase commitments? If so, are they included in inventory? 4. Assume ending inventory for 2016 was $1,306.4 million. Compute the inventory turnover ratio for 2018 and 2017. What is your evaluation of the difference? (Round your answer to two decimal places.) 5. Recreate summary journal entries to record the transactions that affected inventory during 2018. (Assume all inventory purchases were on account.)

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 7, Problem 8C
Textbook Problem

Analyzing Starbucks’s Inventory Disclosures Obtain Starbucks’s 2017 annual report either using the “Investor Relations” portion of its web site (do a Web search for Starbucks investor relations) or go to http://www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).”

Required:

  1. 1. What is the primary cost flow assumption that Starbucks uses: Discuss how the amounts reported under this assumption compare to amounts reported under alternative cost flow assumptions. Explain why you think Starbucks selected this method.
  2. 2. What type of inventory system—perpetual or periodic—do you think Starbucks uses?
  3. 3. Does Starbucks have any purchase commitments? If so, are they included in inventory?
  4. 4. Assume ending inventory for 2016 was $1,306.4 million. Compute the inventory turnover ratio for 2018 and 2017. What is your evaluation of the difference? (Round your answer to two decimal places.)
  5. 5. Recreate summary journal entries to record the transactions that affected inventory during 2018. (Assume all inventory purchases were on account.)

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 7 Solutions

Intermediate Accounting: Reporting And Analysis
Show all chapter solutions
Ch. 7 - How, and under what conditions, does a company...Ch. 7 - Consider each of the following independent...Ch. 7 - Describe the key concept in determining the cost...Ch. 7 - Distinguish between product and period costs.Ch. 7 - Discuss the advantages and disadvantages of the...Ch. 7 - Why does the application of the FIFO, average...Ch. 7 - The costs of which units of cost of goods...Ch. 7 - Discuss the LIFO cost flow assumption. Under what...Ch. 7 - During a period of rising costs, indicate whether...Ch. 7 - Which cost flow assumption, LIFO or FIFO, produces...Ch. 7 - Discuss the LIFO and FIFO cost flow assumptions...Ch. 7 - Explain the issue of inventory liquidation when a...Ch. 7 - What factors might influence management's...Ch. 7 - List the acceptable cost flow assumptions under...Ch. 7 - What are the advantages of dollar value LIFO as...Ch. 7 - Explain the dollar-value LIFO method of inventory...Ch. 7 - Describe the double-extension and link-chain...Ch. 7 - What types of information do companies disclose...Ch. 7 - What is a LIFO reserve?Ch. 7 - What is the impact of LIFO inventory liquidation...Ch. 7 - Goods on consignment should be included in the...Ch. 7 - The following items were included in Venicio...Ch. 7 - During 2019, R Corp., a manufacturer of chocolate...Ch. 7 - Dixon Menswear Shop purchased shirts from Colt...Ch. 7 - The moving average inventory cost flow assumption...Ch. 7 - The cost of the inventory on January 31, 2019,...Ch. 7 - Questions M7-6 and M7-7 are based on the following...Ch. 7 - Assuming no beginning inventory, what can be said...Ch. 7 - On December 31, 2018, Kern Company adopted the...Ch. 7 - When the double-extension approach to the...Ch. 7 - On December 31, Pitts Manufacturing Company...Ch. 7 - On January 1, Pope Enterprises inventory was...Ch. 7 - Reid Company uses the periodic inventory system....Ch. 7 - Billings Company uses a periodic inventory system....Ch. 7 - Dani Corporation signed a binding commitment on...Ch. 7 - Stevens Company uses a perpetual inventory system....Ch. 7 - RE7-6 Stevens Company uses a perpetual inventory...Ch. 7 - Johnson Company uses a perpetual inventory system....Ch. 7 - RE7-8 Johnson Company uses a perpetual inventory...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - On January 1 of Year 1, Dorso Company adopted the...Ch. 7 - An evaluation of Bryces Bookstores inventory was...Ch. 7 - Inventory Accounts for a Manufacturing Company...Ch. 7 - Applying the Cost of Goods Sold Model The...Ch. 7 - Perpetual versus Periodic Inventory Systems Graham...Ch. 7 - Determining Net Purchases The following amounts...Ch. 7 - Perpetual versus Periodic Inventory Systems...Ch. 7 - Goods in Transit Gravais Company made two...Ch. 7 - Items Included in Inventory The following are...Ch. 7 - Loss on Purchase Commitment During 2019, Boge...Ch. 7 - Discounts Hirsch Company buys inventory for 20,000...Ch. 7 - Discounts Nelson Company bought inventory for...Ch. 7 - Alternative Inventory Methods Nevens Company uses...Ch. 7 - Alternative Inventory Methods Park Companys...Ch. 7 - Alternative Inventory Methods Frate Company was...Ch. 7 - LIFO, Perpetual and Periodic Riedel Companys...Ch. 7 - Habicht Company was formed in 2018 to produce a...Ch. 7 - Dollar-Value LIFO A company adopted the LIFO...Ch. 7 - On January 1, 2018, Sato Company adopted the...Ch. 7 - Dollar-Value LIFO Beistock Company manufactures...Ch. 7 - Acute Company manufactures a single product. On...Ch. 7 - Inventory Pools Stone Shoe Company adopted...Ch. 7 - Grimstad Company uses FIFO for internal reporting...Ch. 7 - LIFO and Interim Financial Reports Assume prices...Ch. 7 - Applying the Cost of Goods Sold Model The...Ch. 7 - Items to Be Included in Inventory As the auditor...Ch. 7 - Valuation of Inventory The inventory on hand at...Ch. 7 - Discounts On April 11, Edwards Construction...Ch. 7 - Cost of Goods Sold As an accountant for Lee...Ch. 7 - Alternative Inventory Methods Garrett Company has...Ch. 7 - Totman Company has the following transactions...Ch. 7 - Comprehensive The following information for 2019...Ch. 7 - LIFO Liquidation Profit Hammond Company adopted...Ch. 7 - LIFO and Inventory Pools On January 1, 2016,...Ch. 7 - Olson Company adopted the dollar-value LIFO method...Ch. 7 - Dollar-Value LIFO Kwestel Company adopted the...Ch. 7 - Webster Company adopted do liar-value LIFO on...Ch. 7 - Dollar-Value LIFOComprehensive Kelly Company...Ch. 7 - On January 1, 2019, Lucas Distributors Inc....Ch. 7 - Inventory Valuation You are engaged in an audit of...Ch. 7 - Allen Company is a wholesale distributor of...Ch. 7 - FIFO and LIFO A company may compute inventory...Ch. 7 - Purchase Discounts, FIFO, and LIFO Taylor Company,...Ch. 7 - In January, Broome Inc. requested and secured...Ch. 7 - Purchase Discounts Auge Company annually purchases...Ch. 7 - The 1970s were a period of historically high...Ch. 7 - Interpretation of GAAP and Ethical Issues Robin...Ch. 7 - Selection of an Inventory Method and Ethical...Ch. 7 - Analyzing Starbuckss Inventory Disclosures Obtain...Ch. 7 - Fenimore Manufacturing Company uses the average...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
(Cooperatives) How do cooperatives differ from typical businesses?

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Why do economists make assumptions?

Essentials of Economics (MindTap Course List)

Explain how a trial balance and a balance sheet differ.

College Accounting (Book Only): A Career Approach

INTEREST RATE DETERMINATION AND YIELD CURVES a. What effect would each of the following events likely have on t...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What are the three inventories needed in a manufacturing business?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)