Obtain Starbuckss 2017 annual report either using the Investor Relations portion of its web site (do a

Question:

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.)

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...

Fantastic news! We've Found the answer you've been seeking!