Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 10C
Analyzing Starbucks’ Inventory Disclosures
Obtain Starbucks’ 2017 annual report either using the “Investor Relations” portion of its website (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 classifications are used by Starbucks to value its inventory?
- 2. How does Starbucks value its inventory?
- 3. What is the amount of inventory write-downs for 2018? Can you tell if Starbucks records inventory write-downs using the direct or allowance method?
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A company uses ABC analysis to help manage its inventory. Its current stock of inventory reflects the following iterns, itern value and quantity.
Click the icon to view company's inventory database.
Find the percentage input to the total dollar value for each item (enter your responses rounded to one decimal place)
% Dollar Value
Item Part
142-AZ
More Info
W
Item Part
142-AZ
4392-GF
86935-ES
173-DC
999-BA
7846-NM
2765-OP
103-VX
2648-YT
Item Cost ($)
564
46
16.00
647
193
20
367
11.50
16.50
Quantity
In-Stock
330
1,291
3,521
1,856
509
993
809
4,818
5,134
P
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Use the following excerpts from Jasper Company's financial statements and complete the worksheets below to determine cash paid to suppliers for inventory in
2018.
From Balance Sheets:
Inventory
Accounts Payable
Dec. 31, 2018
$35,000
22.000
Dec. 31, 2017
$31,000
20,500
2018
175,900
From Income Statement:
Cost of Goods Sold
PLEASE NOTE: You are to follow the format shown in the textbook.
Step01: Inventory Purchased
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Step02: Cash paid for Inventory Purchases
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Computing cost of goods sold in a periodic inventory system
Clink Electric uses the periodic inventory system. Clink reported the following selected amounts at May 31, 2018:
Compute the following for Clink:
a. Cost of goods sold.
b. Gross profit.
Chapter 8 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 8 - Under what circumstances will a company value...Ch. 8 - What is the conceptual justification for reducing...Ch. 8 - Define the terms cost, net realizable value, and...Ch. 8 - For companies that use either LIFO or the retail...Ch. 8 - What three implementation approaches may a company...Ch. 8 - Describe the two approaches to recording the...Ch. 8 - Prob. 7GICh. 8 - In applying the inventory valuation rules to...Ch. 8 - Prob. 9GICh. 8 - What are the exceptions to historical cost...
Ch. 8 - Prob. 11GICh. 8 - Prob. 12GICh. 8 - What is the basic assumption underlying the gross...Ch. 8 - Prob. 14GICh. 8 - Prob. 15GICh. 8 - Explain the meaning of the following terms:...Ch. 8 - Prob. 17GICh. 8 - Prob. 18GICh. 8 - The retail inventory method indicated an inventory...Ch. 8 - Prob. 20GICh. 8 - Indicate the effect of each of the following...Ch. 8 - Sienna Company uses the FIFO cost flow assumption....Ch. 8 - Moore Company uses the LIFO cost flow assumption...Ch. 8 - A company uses the LIFO cost flow assumption. The...Ch. 8 - Prob. 4MCCh. 8 - Hestor Companys records indicate the following...Ch. 8 - Under the retail inventory method, freight-in...Ch. 8 - The retail inventory method would include which of...Ch. 8 - At December 31, 2019, the following information...Ch. 8 - Estimates of price-level changes for specific...Ch. 8 - A company forgets to record a purchase on credit...Ch. 8 - Brown Company has the following information...Ch. 8 - Black Corporation uses the LIFO cost flow...Ch. 8 - Blue Corporation uses the FIFO cost flow...Ch. 8 - Paul Corporation uses FIFO and reports the...Ch. 8 - Using the information provided in RE8-4, prepare...Ch. 8 - Kays Beauty Supply uses the gross profit method to...Ch. 8 - Uncle Butchs Hunting Supply Shop reports the...Ch. 8 - Use the information in RE8-7. Calculate Uncle...Ch. 8 - Use the information in RE8-7. Calculate Uncle...Ch. 8 - Use the information in RE8-7. Calculate Uncle...Ch. 8 - Johnson Corporation had beginning inventory of...Ch. 8 - Borys Companys periodic inventory at December 31,...Ch. 8 - Refer to the information provided in RE8-4. If...Ch. 8 - Refer to the information provided in RE8-4. If...Ch. 8 - Inventory Write-Down Stiles Corporation uses the...Ch. 8 - Inventory Write-Down Stiles Corporation uses the...Ch. 8 - Inventory Write-Down Byron Company has five...Ch. 8 - Inventory Write-Down The following information for...Ch. 8 - Inventory Write-Down The following information is...Ch. 8 - Inventory Write-Down The inventories of Berry...Ch. 8 - Prob. 7ECh. 8 - Gross Profit Method: Estimation of Flood Loss On...Ch. 8 - Prob. 9ECh. 8 - Gross Profit Method: Estimation of Theft Loss You...Ch. 8 - Retail Inventory Method Harmes Company is a...Ch. 8 - Retail Inventory Method The following data were...Ch. 8 - Retail Inventory Method The following information...Ch. 8 - Dollar-Value LIFO Retail Johns Company adopts the...Ch. 8 - Dollar-Value LIFO Retail Wyatt Company adopts the...Ch. 8 - Dollar-Value LIFO Retail On December 31, 2018,...Ch. 8 - Errors A company that uses the periodic inventory...Ch. 8 - Errors During the course of your examination of...Ch. 8 - (Appendix 8.1) Inventory Write-Down The...Ch. 8 - Inventory Write-Down Palmquist Company has five...Ch. 8 - Inventory Write-Down The following are the...Ch. 8 - Inventory Write-Down The inventory records of...Ch. 8 - Gross Profit Method: Estimation of Fire Loss On...Ch. 8 - Gross Profit Method: Estimation of Flood Loss On...Ch. 8 - Retail Inventory Method Turner Corporation uses...Ch. 8 - Retail Inventory Method EKC Company uses the...Ch. 8 - Retail Inventory Method Red Department Store uses...Ch. 8 - Retail Inventory Method Weber Corporation uses the...Ch. 8 - Dollar-Value LIFO Retail The following information...Ch. 8 - Dollar-Value LIFO Retail Intella Inc. adopted the...Ch. 8 - Prob. 12PCh. 8 - Errors As controller of Lerner Company, which uses...Ch. 8 - Comprehensive: Inventory Adjustments Layne...Ch. 8 - (Appendix 8.1) Inventory Write-Down The following...Ch. 8 - (Appendix 8.1) Inventory Write-Down Frost Companys...Ch. 8 - Prob. 1CCh. 8 - Sandberg Paint Company, your client, manufactures...Ch. 8 - Prob. 3CCh. 8 - Inventory Valuation Issues Hanlon Company...Ch. 8 - Gross Profit Shelly Corporation is an importer and...Ch. 8 - Prob. 6CCh. 8 - Prob. 7CCh. 8 - Various Inventory Issues Hudson Company, which is...Ch. 8 - Analyzing Starbucks Inventory Disclosures Obtain...Ch. 8 - Analyzing Moet Hennessy Louis Vuittons (LVMH)...
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- Analyzing Starbuckss Inventory Disclosures Obtain Starbuckss 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 systemperpetual or periodicdo 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.)arrow_forwardAnalyzing Moet Hennessy Louis Vuittons (LVMH) Inventory Disclosures Obtain Moet Hennessy Louis Vuittons 2017 annual report using the Investor Relations portion of its website (do a web search for Moet Hennessy Louis Vuitton investor relations). Required: 1. Describe the inventory of LVMH. 2. How does LVMH value its inventory other than wines? Why doesnt LVMH use LIFO? 3. How does LVMH value its wine inventory? What is the justification for this valuation? 4. Did LVMH record any inventory write-downs during the year? If so, what was the dollar amount and can any conclusions be drawn from the pattern or write-downs.arrow_forwardThe following data pertain to 2012 activities of Twisp Industries: Use your completed worksheet to determine the firms cost of goods sold for 2012. Remember to change the year in row 24 and to enter new beginning inventory balances. Save the 2012 file as MFG3. Print the worksheet when done. If sales and other expenses were identical in 2011 and 2012, during which year did Twisp earn more income? Why?arrow_forward
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