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Intermediate Accounting: Reporting...

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

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Analyzing Starbucks’ Inventory Disclosures

Obtain Starbucks’ 2017 annual report either using the “Investor Relations” portion of its website (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 classifications are used by Starbucks to value its inventory?
  2. 2. How does Starbucks value its inventory?
  3. 3. What is the amount of inventory write-downs for 2018? Can you tell if Starbucks records inventory write-downs using the direct or allowance method?

1.

To determine

Indicate the classifications that are used by S Corporation to value its inventory.

Explanation

From the “Investor Relations” portion of the website of Company S, following facts are revealed:

Company S classifies its inventory as unroasted coffee ($541.0 million), roasted coffee ($301...

2.

To determine

Explain how S Corporation values its inventory.

3.

To determine

Find out the amount of inventory write-downs for the year 2018, and indicate the method used by S Corporation for write-downs its inventory.

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