Refer to Wendy’s financial statements in Appendix D. Review the financial statements to determine how and where any disposals of fixed assets were reported.

Also identify how and where any gains or losses on disposals of fixed assets were reported.

Required

a. Were the gains or losses on disposals of fixed assets clearly reported?

b. How much of Wendy’s income before income taxes can be attributed to the disposal of fixed assets?

c. Refer to the statement of cash flows. How much cash was received from restaurant dispositions? How much cash was spent on capital expenditures?