Problem 1 Use Starbucks Corporation's financial statements to answer to the following questions According to the footnotes, what was the total acquisition cost of Land that Starbucks owns as of September 27, 2020 (1 point) $ According to the footnotes, what was the total acquisition cost of the Property, Plant, and Equipment that Starbucks owns as of September 27, 2020 (1 point) $ 3 Does Starbuckss Goodwill footnote suggest that the company acquired any other companies during fiscal year 2020 (Circle one) (1 point) YES NO 4 Does Starbuckss Goodwill footnote suggest that the company acquired any other companies during fiscal year 2019 (Circle one) (1 point) YES NO Starbucks Corporation's Financial Statements (partial) Consolidated Balance Sheets In millions of dollars ASSETS As of Sept 27, 2020 As of Sept 29, 2019 Cash and cash equivalents $4,350 90 $2,686 60 Short term investments 281 2 70 5 Accounts receivable, net 883 4 879 2 Inventories 1,551 40 1,529 40 Prepaid expenses and other current assets 739 5 488 2 Total current assets $7,806 40 $5,653 90 Long term investments 684 8 616 0 Property, plant, and equipment, net 6,241 4 6,431 7 Other long term assets 10,492 6 2,245 4 Goodwill 552 1 781 8 Other intangible assets 3,597 2 3,490 8 Total assets $29,374 5 $19,219 6 LIABILITIES AND STOCKHOLDERS EQUITY Accounts payable $997 9 $1,189 7 Accrued liabilities 1,856 7 2,418 3 Unearned revenues 1,456 5 1,269 0 Current portion of long term debt 2498 7 0 Other current liabilities 537 0 1,291 7 Total current liabilities 7,346 8 6,168 7 Long term debt 14,659 6 11,167 0 Other long term liabilities 6,350 4 1,540 1 Total liabilities 28,356 8 18,875 8 Common stock 375 1 42 3 Retained earnings 615 6 301 5 Total stockholders' equity 990 7 343 8 Total liabilities and stockholders' equity $29,347 5 $19,219 6 Notes to Consolidated Financial Statements (partial) Footnote 1 Summary of Significant Accounting Policies 1 1 Description of Business We purchase and roast high quality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh and prepared food items, through our company operated stores We also sell a variety of coffee and tea products and license our trademarks through other channels such as licensed stores, grocery and foodservice 1 3 Fiscal Year Our fiscal year ends on the Sunday closest to September 30 Fiscal year 2020 ended on September 27, 2020, fiscal year 2019 ended on September 29, 2019, and fiscal year 2018 ended on September 30, 2018 1 12 Property, Plant, and Equipment Property, plant and equipment are carried at cost less accumulated depreciation Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases Depreciation is computed using the straight line method over estimated useful lives of the assets, generally ranging from 2 to 15 years for equipment and 30 to 40 years for buildings Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 10 years Depreciation expense totaled $1,207 6 million and $1,144 5 million in fiscal years 2020 and 2019, respectively The following table summarizes property and equipment (in millions) As of 9 27 2020 9 29 2019 Land $ 46 0 $ 46 8 Buildings 586 8 691 5 Leasehold improvements 8,262 6 7,948 6 Fixtures and equipment 4,882 6 5,228 1 Work in progress 377 3 358 5 Total property, plant and equipment 14,155 3 14,273 5 Accumulated depreciation (7,913 9) (7,841 8) Property, plant and equipment, net $ 6,241 4 $ 6,431 7 1 14 Goodwill and Other Intangible Assets We evaluate goodwill for impairment annually during our third fiscal quarter, or more frequently if an event occurs or circumstances change Other intangible assets include finite lived intangible assets, which mainly consist of acquired and reacquired rights, trade secrets, licensing agreements, contract based patents and copyrights These assets are amortized over their estimated useful lives and are tested for impairment Indefinite lived intangibles, which consist primarily of trade names and trademarks, are tested for impairment annually during the third fiscal quarter, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist The following reflects goodwill activity for fiscal years 2020 and 2019 (in millions) Goodwill balance as of September 30, 2018 $ 3,541 6 Divestitures(5 5) Other (45 3) Goodwill balance as of September 29, 2019 $ 3,490 8 Other 106 4 Goodwill balance as of September 27, 2020 $ 3,597 2 Amortization expense for finite lived intangible assets was $223 7 million and $232 8 million in fiscal years 2020 and 2019, respectively

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 11, 2024

Problem 1 Use Starbucks Corporation's financial statements to answer to the following questions. According to the footnotes, what was the total acquisition cost of Land

Problem 1

Use Starbucks Corporation's financial statements to answer to the following questions.

According to the footnotes, what was the total acquisition cost of Land that Starbucks owns as of September 27, 2020? (1 point)

$ _________________

According to the footnotes, what was the total acquisition cost of the Property, Plant, and Equipment that Starbucks owns as of September 27, 2020? (1 point)

$ _________________

3. Does Starbuckss Goodwill footnote suggest that the company acquired any other companies during fiscal year 2020? (Circle one) (1 point)

YES NO

4. Does Starbuckss Goodwill footnote suggest that the company acquired any other companies during fiscal year 2019? (Circle one) (1 point)

YES NO

Starbucks Corporation's Financial Statements (partial)

Consolidated Balance Sheets In millions of dollars
ASSETS	As of Sept. 27, 2020	As of Sept. 29, 2019
Cash and cash equivalents	$4,350.90	$2,686.60
Short-term investments	281.2	70.5
Accounts receivable, net	883.4	879.2
Inventories	1,551.40	1,529.40
Prepaid expenses and other current assets	739.5	488.2
Total current assets	$7,806.40	$5,653.90
Long-term investments	684.8	616.0
Property, plant, and equipment, net	6,241.4	6,431.7
Other long-term assets	10,492.6	2,245.4
Goodwill	552.1	781.8
Other intangible assets	3,597.2	3,490.8
Total assets	$29,374.5	$19,219.6
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable	$997.9	$1,189.7
Accrued liabilities	1,856.7	2,418.3
Unearned revenues	1,456.5	1,269.0
Current portion of long-term debt	2498.7	0
Other current liabilities	537.0	1,291.7
Total current liabilities	7,346.8	6,168.7
Long-term debt	14,659.6	11,167.0
Other long-term liabilities	6,350.4	1,540.1
Total liabilities	28,356.8	18,875.8
Common stock	375.1	42.3
Retained earnings	615.6	301.5
Total stockholders' equity	990.7	343.8
Total liabilities and stockholders' equity	$29,347.5	$19,219.6

Notes to Consolidated Financial Statements (partial) Footnote 1. Summary of Significant Accounting Policies 1.1 Description of Business We purchase and roast high-quality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh and prepared food items, through our company-operated stores. We also sell a variety of coffee and tea products and license our trademarks through other channels such as licensed stores, grocery and foodservice. 1.3 Fiscal Year Our fiscal year ends on the Sunday closest to September 30. Fiscal year 2020 ended on September 27, 2020, fiscal year 2019 ended on September 29, 2019, and fiscal year 2018 ended on September 30, 2018. 1.12 Property, Plant, and Equipment Property, plant and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from 2 to 15 years for equipment and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 10 years. Depreciation expense totaled $1,207.6 million and $1,144.5 million in fiscal years 2020 and 2019, respectively. The following table summarizes property and equipment (in millions):
	As of
	9/27/2020	9/29/2019
Land	$ 46.0	$ 46.8
Buildings	586.8	691.5
Leasehold improvements	8,262.6	7,948.6
Fixtures and equipment	4,882.6	5,228.1
Work in progress	377.3	358.5
Total property, plant and equipment	14,155.3	14,273.5
Accumulated depreciation	(7,913.9)	(7,841.8)
Property, plant and equipment, net	$ 6,241.4	$ 6,431.7
1.14 Goodwill and Other Intangible Assets We evaluate goodwill for impairment annually during our third fiscal quarter, or more frequently if an event occurs or circumstances change. Other intangible assets include finite-lived intangible assets, which mainly consist of acquired and reacquired rights, trade secrets, licensing agreements, contract-based patents and copyrights. These assets are amortized over their estimated useful lives and are tested for impairment. Indefinite-lived intangibles, which consist primarily of trade names and trademarks, are tested for impairment annually during the third fiscal quarter, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. The following reflects goodwill activity for fiscal years 2020 and 2019 (in millions): Goodwill balance as of September 30, 2018 $ 3,541.6 Divestitures(5.5) Other (45.3) Goodwill balance as of September 29, 2019 $ 3,490.8 Other 106.4 Goodwill balance as of September 27, 2020 $ 3,597.2 Amortization expense for finite-lived intangible assets was $223.7 million and $232.8 million in fiscal years 2020 and 2019, respectively.