Using the Starbucks 2019 annual report, answer the following questions: 1. At year-end 2018, how much of Starbucks' long-term debt will be due within one year? 2. How does Starbucks determine its allowance for uncollectible accounts? 3. What was Starbucks' allowance for uncollectible accounts at year-end 2019? 4. What method does Starbucks use to depreciate its long-term assets? 5. How much does Starbucks owe its employees for wages earned at year-end 2019 but have not yet been paid? 6. Basic Earnings per Share (EPS) for 2019 is listed as $2.95 per share. Show the calculation that resulted in that EPS amount. 7. Does it appear that Starbucks prefers debt financing or equity financing? Justify your answer. 8. Show how the $1.2 million of common stock in 2019 was determined. 9. What is the difference in dollars) between the par value of issued stock and the cash received when it was issued? 10. Does Starbucks have any treasury stock or preferred stock? Justify your answer. 11. How does Starbucks record their gift card revenue? 12. Where in the 2019 financial statements does the dollar amount of gift cards that have not been redeemed appear? Why? 13. Why might Starbucks have a negative retained earnings balance at year-end 2019? Justify your answer. STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Fiscal Year Ended Net revenues: Company-operated stores Licensed stores Other Total net revenues Cost of sales Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Interest income and other, net Interest expense Earnings before income taxes Income tax expense Net earnings including noncontrolling interests Net carnings/(loss) attributable to noncontrolling interests Net carnings attributable to Starbucks Earnings per share --- basic Earnings per share-diluted Weighted average shares outstanding: Basic Diluted 21.544.4 $ 2,8750 2,089.2 26,508.6 8.526.9 10.493.6 371.0 1,377.3 1.824.1 135.8 22,728.7 298.0 4,0779 19,690.3 $ 2,652.2 2,3770 24,7195 7930.7 9.472.2 554.9 1,247.0 1,708.2 2244 21.1374 301.2 3,883.3 1,3764 499.2 1914 (1703) 5.780.0 1,262.0 4,5180 (0.3) 4.518.3 $ 3.27 S 3.24 $ 17,650.7 2.355.0 2,3811 22,386.8 7.065.8 8.486.4 518.0 1,0114 1.408.4 153.5 18,643.5 3914 4,134.7 622.8 96.5 (331.0) 4.466.2 871.6 3.594.6 935 181.8 (92.5) 4,317.5 1.432.6 2,884.9 0.2 2,884.7 1.99 197 (4.6) $ $ 3,599.25 2.95 $ 2.92 S S 1.221.2 1.233.2 1,382.7 1,394,6 1,449.5 1.461.5 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Fiscal Year Ended Sep 29, 2019 3,594.6 $ Sep 30, 2018 4,518.0 5 Oct 1, 2017 2,8849 105 (95) Net carnings including noncontrolling interests Other comprehensive income/(loss), net of tax: Unrealized holding gains/(losses) on available-for-sale securities Tax (expense)/benefit Unrealized gains/(losses) on cash flow hedging instruments Tax (expense) benefit Unrealized gains/(losses) on net investment hedging instruments Tax (expense)/benefit Translation adjustment and other Tax (expense)/benefit Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment Tax expense/(benefit) Other comprehensive income/loss) Comprehensive income including noncontrolling interests Comprehensive income/(loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks (23) (14.1) 3.4 (39.8) 10.1 (146.2) (7.0) 1.9 244 (6.5) 7.8 (2.2) (220.0) 3.4 2.9 53.2 (12.6) 20.1 (74) (38.3) (2.4) 25 1.3 1.6 (173.0) 3,421.6 24.7 (1.2) (174.7) 4.343.3 (672) 14.0 (472) 2.837.7 (4.6) 3,426.2 S (0.3) 4,343,6 $ 0.2 2,837.5 $ STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Sep 29, 2019 Sep 30, 2018 S 2,686,6 $ 70.5 879.2 1,529.4 488.2 5,653.9 220.0 396,0 6,431.7 1.765.8 479,6 781.8 3.490.8 19.219.6 $ 8,756.3 1815 693.1 1,400.5 1.462.8 124942 267.7 334.7 5929.1 134.7 4122 1,042.2 3,541.6 24,1564 ASSETS Current assets Cash and cash equivalents Short-term investments Accounts receivable, not Inventories Prepaid expenses and other current assets Total current assets Long-term investments Equity investments Property, plant and cquipment, net Deferred income taxes, net Other long-term assets Other intangible assets Goodwill TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY/DEFICIT) Current liabilities: Accounts payable Accrued liabilities Accrued payroll and benefits Income taxes payable Stored value card liability and current portion of deferred revenue Current portion of long-term debt Total current liabilities Long-term debe Deferred revenue Other long-term liabilities Total liabilities Shareholders' equity/(deficit): Common stock (S0.001 par value) authorized, 2400.0 shares, issued and outstanding. 1.1846 and 1 309.1 shares, respectively Additional paid-in capital Retained earnings/(deficit) Accumulated other comprehensive loss Total shareholders' equity/(deficit) Noncontrolling interests Total equity/(deficit) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/DEFICIT) S 1.189.7 $ 1.753.7 664.6 1,291.7 1.269.0 1.179.3 1.752.5 656.8 102.8 1.642.9 349.9 5,684.2 9.090.2 6,775.7 1.430.5 22.980.6 6,168 7 11,1670 6,7444 1.370.5 25.450.6 12 41.1 (5.771.2) (503.3) (6,2322) 12 (6.231.0) 19,219.6 5 13 41.1 1,4574 (3303) 1.169.5 63 1.1758 24,156,4 $ Sep 30, 2013 Oct 1 2017 45180 $ 2,8849 1,067.1 95.1 (310.2) 186,6 1,305.9 714.9 (2428) 226.8 (1.3764) (499.2) 250.3 37.6 89.0 (93.5) 176.0 87.2 68.9 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Sep 29. Eiscal Year Ended 2019 OPERATING ACTIVITIES: Net earnings including noncontrolling interests 3.594,6 $ Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1.449.3 Deferred income taxes, net (1.495.4) Income earned from equity method investees (250.6) Distributions received from equity method investees 216.8 Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain retail operations (6228) Stock-based compensation 3080 Goodwill impairments 10.5 Other 1879 Cash provided by changes in operating assets and liabilities: Accounts receivable (1977) Inventories (173.0) Prepaid expenses and other current assets 9220 Income taxes payable 1.237.1 Accounts payable 319 Deferred revenue (30.5) Other operating assets and liabilities 0410 Net cash provided by operating activities 5.047.0 INVESTING ACTIVITIES: Purchases of investments (1904) Sales of investments 298.3 Maturities and calls of investments 59.8 Acquisitions, net of cash acquired Additions to property, plant and equipment (1.8066) Net proceeds from the divestiture of certain operations 6843 Other (562) Net cash used by investing activities (1.010.8) FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 1.996.0 Repayments of long-term debt (350,0) Proceeds from issuance of common stock 4098 Cash dividends paid (1.7613) Repurchase of common stock (10.2223) Minimum tax withholdings on share-based awards ( (1116) Other (175) Net cash used by financing activities (10,056,9) Effect of exchange rate changes on cash and cash equivalents (490) Net increase/(decrease in cash and cash equivalents (6.069.7) CASH AND CASH EQUIVALENTS: Beginning of period 8,7563 End of period 2.6866 S SUPPLEMENTAL DISCLOSURE OF CASH FLOW Cash paid during the period for: Interest.net of capitalized interest 299$$ Income taxes, net of refunds 470.15 131.0 (41.2) (8395) 146.0 391.6 7.1094 164 11937.8 (96.8) 14.0 (200) 191.9) 46.4 130.8 1072 4.251.8 (6744) 1,0545 149.6 (1919) 4590 453 (1.311.3) (1.976.4) 608.2 56 (2.3615) (1 519.4) 85.4 543 (850.0) 5,584.1 1539 (1.743.4) 7,1335) (62.7) 412) 3.242.8) 39.5 6.2940 750.2 (400.0) 150.8 (1 450.4) (2.0425) (82.8) 14.4 (3079.1) 10.8 3333 2.4623 8756,35 2.1288 2.4623 137.1 $ 1.1769 $ 96.6 1,389.1 48 Starbucks Corporation 2019 Form 10-K Balance, October 2, 2016 Net Gaming Other comprehensive income ow) Stock based compensation expense Exercise of stock options/vesting of RSU. Sale of common stock, including tax benefit of 502 Repurchase of common stock Cuh dividends declared, 3105 per share Balance, October 1, 2017 Net earning (los) Other comprehensive income dou) Stock-based compensation experie Exercise of stock optionsvesting of RSU Sale of costock Repurchase of common Mock Cash dividends declared. 51.32 per share Net distributions to controlling interests Balance, September 30, 2018 Cumulative effect of adaption of new counting guide Netcamingulos Other comprehensive income Stock based compendio expense Exercise of stock option/veiting of BSU. Sale of common stock Repurchase of common Cal divided declared, 5149 per share Net distributions to becoming interest Balance, September 29, 2019 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EQUITY (in milions, except per share data) Commen Stock Accumulated Retained Other Additional Earlag Comprehensive Shareholders' Necontrolling Shares Amount Muild-in Capital (D) Inace/Low) EquityDeficio Interests 1460 55 135 4115 591985 (1084) 3.88405 6.75 2.884.7 28847 02 (472) (472) 1779 1779 81 1170 1170 OS 28.7 28.7 (375) (0:1) (3236) (1.7554) 2079.1) (1.3159) (15159 14316S 145 4115 5.56325 (1556) 5 54501 695 4.5183 4.3183 (0.3) (174,7) (1747) 2518 2538 84 594 59.4 06 18 (1315) (0.1) (345) (6.8636) (2007) (1,7605) (1.7605) (0:3) 1.1091 4115 145745 103) 5 1.16935 63 5 Total 5.8907 2.8349 (472) 177.9 1170 28.7 079.1) (1.3159 54570 43180 (1947 2315 394 31. 02087) (1.760.5) 100 1.175 III 1956 3.5992 (46) (1710) 147 04 M 3113 1649 334 1956 3.3992 (1710) 3113 1649 334 (10,131.5) (1.2016) 11 1956 1.5946 (1930) 13 2003 3144 (1013159 (1 016) 10.99 6230 (0.1) 18 09.311 (1016) (S033) 5 05 12 16.212 213 125 4115 5.2712) 5 See Notes to Consolidated Financial Statements