Q1. From 9/29/2007 to 9/25/2010 sales revenues (______________ / decreased), indicating the company is (_________________________/ successful at controlling costs / well managed).
Q2. Cost of goods sold (COGS) is a(n) (revenue / _______ / asset / liability) account that totaled what amount for fiscal year ended .
9/25/2008? _________ Million
9/26/2009? _________ Million
9/27/2010? __________ Million
The beginning balance of COGS was what amount for fiscal year ended .
9/25/2008? ________ Million
9/26/2009? _______ Million
9/27/2010? ________ Million
Q3. What is the greatest expense for this company? (___________ / SGA expense / provision for income tax). What typical costs might be included in this expense?
Q4. Let’s compare some trends in the data:
a. From 9/29/2007 to 9/25/2010, Sales Revenue (decreased / ______________ / tripled).
b. From 9/29/2007 to 9/25/2010, COGS (decreased / ______________ / tripled). This amount of increase is (expected / unexpected). Why?
c. From 9/29/2007 to 9/25/2010, R&D (decreased / ______________ / tripled). What does this indicate?
d. From 9/29/2007 to 9/25/2010, provision for income tax (decreased / ______________ / tripled). This amount of increase is (______________/ unexpected). Why?
e. From 9/29/2007 to 9/25/2010, net income (decreased / more than tripled / ______________), which is an extremely (______________/ unfavorable) trend, indicating the company is (selling more merchandise / collecting amounts due from customers / ___________________________).
Q5. When preparing financial statements, use the following rules for placing parentheses.
• Accounts that are typically added or that can either be added or subtracted to compute net income . use no parentheses when added and parentheses when subtracted.
• Accounts that are typically subtracted to compute net income . use no parentheses when subtracted and parentheses when added. A minus sign may be used instead of parentheses.
Parentheses indicate to (subtract / add / __________________).
For example, COGS is typically (added / ______________) to arrive at net income, and therefore, no parentheses indicate to (add / ______________) the amount.
Q6. Develop a strategy to evaluate the income statement. Which line of the income statement would you look at first? Second? Third? Why?