Visit http://www.pearsonhighered.com/Horngren to view a link to Starbucks Corporation’s Fiscal 2013 annual report. Refer to the Starbucks Corporation financial statements, including Notes 1 and 7. Answer the following questions.
1. Which depreciation method does Starbucks Corporation use for reporting in the financial statements? What type of depreciation method does the company probably use for income tax purposes?
2. What was the amount of depreciation and amortization expense for the year ending September 29, 2013?
3. The statement of cash flows reports the cash purchases of property, plant, and equipment. How much were Starbucks’s additions to property, plant, and equipment during the year ending 2013? Did Starbucks record any proceeds from the sale of property, plant, and equipment?
4. What was the amount of accumulated depreciation at September 29, 2013? What was the net book value of property, plant, and equipment for Starbucks as of September 29, 2013?
5. Compute Starbucks’s asset turnover ratio for year ending September 29, 2013. How does Starbucks’s ratio compare with that of Green Mountain Coffee Roasters, Inc.?