Use Starbucks Corporations Fiscal 2011 Annual Report and the Note 1 data on Allowance for Doubtful

Question:

Use Starbucks Corporation’s Fiscal 2011 Annual Report and the Note 1 data on “ Allowance for Doubtful Accounts” to answer the following questions. Visit www.pearsonhighered.com/Horngren to view a link to Starbucks Corporation’s annual report.

Requirements

1. How much accounts receivables did Starbucks report as of October 2, 2011? As of October 3, 2010?

2. Refer to Note 1, “Allowance for Doubtful Accounts.” How does Starbucks calculate allowance for doubtful accounts? What was the amount of the ac-count as of October 2, 2011? As of October 3, 2010?

3. Compute Starbucks’ acid-test ratio at the end of 2011. If all the current li-abilities came due immediately, could Starbucks pay them?

4. Compute Starbucks’ accounts receivable turnover at the end of 2011. Use total net revenues.

5. Compute Starbucks’ days’ sales in receivables at the end of 2011.

6. How does Starbucks compare to Green Mountain Coffee Roasters, Inc. on the basis of the acid- test ratio, accounts receivable turnover, and days’ sales in receivables?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...