The notes are an important part of a company’s financial statements, giving valuable details that would clutter the tabular data presented in the statements. This case will help you learn to use a company’s inventory notes. Visit www.pearsonhighered.com/Horngren to view a link to Starbucks Corporation Fiscal 2011 Annual Report. Access the financial statements and related notes, and answer the following questions:

Requirements

1. Which inventory costing method does Starbucks use? How does Starbucks value its inventories?

2. By using the cost of goods sold formula, you can compute net purchases, which are not reported in the Starbucks statements. How much were Starbucks’ ­inventory purchases during the year ended October 2, 2011?

3. Determine Starbucks’ inventory turnover and days’ sales in inventory for the years ended October 2, 2011. (Round each ratio to one decimal place.) How do Starbucks’ inventory turnover and days’ sales in inventory compare with Green Mountain Coffee Roasters, Inc. for the year ended September 24, 2011? Explain.