Chapter 5, Problem 5.1FSC

To determine

Cost of Goods Sold:

It is the total cost incurred by a business on the goods sold during a particular period of time.

Gross Profit:

The difference between net sales revenues and cost of goods sold is called gross profit.

To determine:

1. Identify the value of Starbucks Corporation’s inventory at September 29, 2013 and September 30, 2012.

2. By reviewing the Note 5 in the Notes to Consolidated Financial Statements determine what do Starbucks inventories consist of?

3. What was the amount of Starbucks’s cost of goods sold for the year ending September 29, 2013, and the year ending September 30, 2012?

4. Which type of income statement format does Starbucks use? Explain.

5. Computation of Starbuck’s gross profit percentage for the year ending September 29, 2013, and the year ending September 30, 2012. Did the gross profit percentage improve, worsen or hold steady? Assuming the industry average for gross profit percentage is 58.58%, how does Starbucks compare in the industry?