Accounting: Scavenger Hunt Through Starbucks Corporation’s 2015 10-K

Project 1: Scavenger Hunt Through Starbucks Corporation’s 2015 10-K

Required: Obtain Starbucks Corporation’s 2015 form 10K from the SEC’s web site. Consider printing it out, but you may want to do two pages per sheet, it is over 100 pages long! Please answer the following questions on a scantron. This is an individual assignment (i.e., everyone turns in their own scantron), but I encourage you to work with others on questions that stump you.

Due: Monday February 15, 2015 in class. Late assignments will not be accepted.

Possible Points: The assignment is worth a maximum of 25 points. Your grade is based upon the percentage of questions answered correctly, rounded to the nearest point.

General: Note that some of these general questions may require you to do a bit of on-line research.

1. Which of the following forms is a required annual SEC filing?

   1. Proxy Statement

   2. 8k

   3. 10Q

   4. 10K

1. Which of the following forms is a required quarterly SEC filing?

   1. 10Q

   2. 8K

   3. 10k

   4. Statement 14A (Proxy Statement)

1. Which of the following forms does the SEC require to be filed at any time during the year when a company needs to announce “major events” that shareholders should know about?

   1. 10K

   2. 8K

   3. Statement 14A (Proxy Statement)

   4. 10Q

1. What are US publicly traded firms required to file with the SEC when soliciting shareholder votes? This statement is useful in assessing how management is paid and potential conflict-of-interest issues with auditors. The statement includes: voting procedure and information; background information about the company's nominated directors; director compensation; executive compensation; a breakdown of audit and non-audit fees paid to the auditor

1. 1. Press release

   2. Proxy statement

   3. Statement of Retained Earnings

   4. MD&A (Management’s Discussion and Analysis)

   5. None of the above

1. On which stock exchange is Starbucks Corporation traded?

1. AMEX

2. Penny stocks

3. NASDAQ p.1

4. NYSE

1. Who is Starbucks Corporation’s external auditor?

   1. Ernst and Young

   2. PricewaterhouseCoopers

   3. KPMG

   4. Deloitte and Touche

1. The order of information presented in a 10K is generally specified by the SEC, so it will be virtually the same for all companies’ filings. Based upon your review of Starbucks Corporation’s 10K Table of Contents, which of the following is the correct order that these major items appear?

   1. Description of the business, risk factors, selected financial data, management discussion and analysis (MD&A), financial statements/auditors’ report

   2. Selected financial data, management discussion and analysis (MD&A), financial statements and auditors’ report, description of the business, risk factors,

   3. Financial statements and auditors’ report, description of the business, risk factors, selected financial data, management discussion and analysis (MD&A),

   4. Management discussion and analysis (MD&A), financial statements and auditors’ report, description of the business, risk factors, selected financial data

1. What report provides assurance that Starbucks Corporation’s financial statements are “fairly stated”?

   1. Report of Independent Registered Public Accounting Firm on page 88

   2. Report of Management on Internal Control over Financial Reporting on page 89

   3. Report of Independent Registered Public Accounting Firm on page 90

1. Which of the following provide assurance that Starbucks Corporation’s system of internal controls is operating effectively?

   1. Report of Independent Registered Public Accounting Firm on page 88

   2. Report of Management on Internal Control over Financial Reporting on page 89

   3. Report of Independent Registered Public Accounting Firm on page 90

1. Did Starbucks Corporation get an “unqualified” opinion on their financial statements?

1. Yes

2. No

1. When is Starbucks Corporation’s fiscal year end for 2015?

   1. September 27th

   2. September 28th

   3. September 29th

   4. December 31st

1. Which was NOT listed as a significant risk factor for the Starbucks Corporation in 2015?

1. High dependence on financial performance of the Americas operation segment.

2. Food-borne illness, food tampering and food contamination or mislabeling.

3. Intense competition in both channels and markets.

4. Failure to preserve value of the Starbucks brand.

5. All of the above are listed as significant risk factors.

1. Which of the following are NOT identified as Critical Accounting Policies in the 10K?

   1. Revenue recognition

   2. Property, plant and equipment and other finite-lived assets

   3. Goodwill and indefinite-lived intangible assets

   4. Income Taxes

Chapter 4 and 17

1. What format does Starbucks Corporation use for its income statement?

   1. Multi-step

   2. Single step

1. What is the Starbucks Corporation’s Gross Margin for 2015 (in millions)?

   1. $11,375.2

   2. $3601.0

   3. $19,162.7

   4. $2,757.4

1. Which of the following are NOT Other Comprehensive Income items for 2015?

   1. Unrealized holding gains on available-for-sale securities

   2. Unrealized gains on cash flow hedging instruments

   3. Unrealized gains on net investment hedging instruments

   4. Unrealized holding gains on trading securities

1. What is the numerator (in millions) for the calculation of the 2015 Basic EPS of $1.84?

1. $3601.0

2. $2,759.3

3. $3,903.0

4. $2,757.4

1. What is the denominator (in millions) for the calculation of the 2015 Basic EPS of $1.84?

1. 1,495.9

2. 1,498.5

3. 1,524.5

4. 1,506.3

1. On which statement does Starbucks Corporation present comprehensive income?

   1. Statement of shareholders’ equity

   2. Income statement

   3. Statement of comprehensive income

   4. Combined Statement of Comprehensive Income

1. How much unrealized holding gain (loss) on Available-For-Sale securities is reported in Comprehensive Income for 2015 (in millions)?

   1. $1.6

   2. $(0.6)

   3. ($224.7)

   4. $1.4

Chapter 5

1. What is the largest asset on Starbucks Corporation’s 2015 balance sheet?

   1. Cash

   2. Inventories

   3. PP&E

   4. Accounts Receivable

1. How much is Starbucks Corporation’s unsecured revolving credit facility (i.e., line of credit)?

   1. $125,000,000

   2. $750,000,000

   3. $25,800,800

   4. $1,000,000,000

1. Where can Accumulated Other Comprehensive Income NOT be found? Recall this is different from Comprehensive Income.

   1. Income Statement

   2. Equity section of the Balance Sheet

   3. Statement of Shareholders’ Equity

1. Which category of fair value securities is largest for Starbucks?

   1. Level 1

   2. Level 2

   3. Level 3

1. Starbucks Corporation has future commitments related to contractual agreements. Which presents a commitment for the company?

   1. Litigation

   2. Operating lease obligations

   3. Indemnities and guarantees

1. Which of the following financial statements does NOT disclose information about dividends?

1. 1. Statement of cash flows

   2. Balance sheet

   3. Statement of shareholder’s equity

1. Which of the following are NOT valued at fair value according to the Summary of Significant Accounting Policies disclosure in Starbucks Corporation’s 10K?

1. Cash and cash equivalents

2. Available for Sale Securities

3. Inventory

4. Trading Securities

For the next three questions, use the ratios from Chapter 5 in your textbook

1. What is Starbucks Corporation’s 2015 Current Ratio?

1. 1.19

2. 1.88

3. 1.96

4. 1.37

1. What is Starbucks’ 2015 Inventory Turnover? Note the Companyan unusual method of calculating Cost of Goods Sold. COGS includes occupancy costs, as Starbucks argues that they are not only selling their products but also the experience of their stores.

1. 5.96

2. 3.00

3. 6.11

4. 6.5

1. What is Starbucks Corporation’s 2015 Profit Margin on Sales?

1. 14.39%

2. 12.57%

3. 14.40%

4. 18.79%

Chapter 23

1. Does Starbucks Corporation use the direct or indirect method for its cash flow statement?

1. Direct

2. Indirect

1. What is the largest single item that caused Starbucks Corporation’s cash flow from operations to differ from net income in 2015?

1. Depreciation

2. Inventories

3. Accounts receivable

4. Accounts payable

1. From what category of activities did Starbucks Corporation generate the greatest amount of cash in 2015?

1. Operating

2. Investing

3. Financing

1. In which category of activities does Starbucks Corporation use the greatest amount of cash in 2015?

1. Operating

2. Investing

3. Financing

1. What is the net amount of cash provided (used) by Starbucks Corporation in 2015 related to Investing activities (in millions)?

1. ($2,256.5)

2. ($1,520.3)

3. $600.6

4. $8.9

Chapter 7

1. How much was Starbucks Corporation’s allowance for doubtful accounts at the end of 2015 (in millions?)

1. $10.8

2. $6.7

3. $8.9

4. $7.1

1. Which of the following inventory cost flow assumptions does Starbucks primarily use?

   1. LIFO

   2. FIFO

   3. Specific identification

   4. Moving average

1. Which of the following does not discuss Starbucks Corporation’s Goodwill Impairment Policy?

1. MD&A

2. Income Statement

3. Footnote 1

1. How does Starbucks Corporation recognize shipping charges billed to licensees of licensed stores?

1. As part of revenue

2. As part of selling expense

3. As part of cost of goods sold

4. In its own revenue line item

1. Which of the following is not a reason given by Starbucks for recording inventory reserves?

1. Obsolete inventory

2. Slow moving inventory

3. Food spoilage

4. Shrinkage

Page 6 of 6