A311 Case 1
A. The business nature of Starbucks is mainly selling coffee drinks, tea beverages, and fresh food items along with producing and selling a variety of ready-to-drink beverages. Starbucks not only makes money by selling its specialty through cooperated-owned stores but also by licensing its trademarks through other channels.
B. The four types of financial statement commonly prepared by Starbucks for external reporting purposes are the Income Statement, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash flows, and the Statement of Equity. These statements are named Consolidated Statements of Earnings, Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Cash flows, and Consolidated Statements of Equity, respectively.
As Starbucks owns many wholly owned subsidiaries and has significant influence on other companies, it is said to have controlling interest in these subsidiaries and therefore prepares consolidated financial statements. In other words, Starbucks combines its performance with the subsidiaries’ results into coherent financial statements that reflect the financial positions of both entities.
C. Publicly traded corporations typically prepare financial statements for external reporting purposes four times a year (Nguyen).
D. Starbucks’ management holds the responsibility to produce financial statements that reflects the results of operations and acts as fair representations of the company’s financial position.
Potential users of the Starbucks financial statements include, but are not limit to, shareholders, creditors, suppliers, employees, and regulators to better understand its financial position and performance. Investors or shareholders of Starbucks whose goal is to make profit will have special interest in the company’s financial information. Creditors and suppliers may have keen interest in the financial flexibility and especially the solvency of Starbucks. Regulators
B. The four types of financial statement commonly prepared by Starbucks for external reporting purposes are the Income Statement, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash flows, and the Statement of Equity. These statements are named Consolidated Statements of Earnings, Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Cash flows, and Consolidated Statements of Equity, respectively.
As Starbucks owns many wholly owned subsidiaries and has significant influence on other companies, it is said to have controlling interest in these subsidiaries and therefore prepares consolidated financial statements. In other words, Starbucks combines its performance with the subsidiaries’ results into coherent financial statements that reflect the financial positions of both entities.
C. Publicly traded corporations typically prepare financial statements for external reporting purposes four times a year (Nguyen).
D. Starbucks’ management holds the responsibility to produce financial statements that reflects the results of operations and acts as fair representations of the company’s financial position.
Potential users of the Starbucks financial statements include, but are not limit to, shareholders, creditors, suppliers, employees, and regulators to better understand its financial position and performance. Investors or shareholders of Starbucks whose goal is to make profit will have special interest in the company’s financial information. Creditors and suppliers may have keen interest in the financial flexibility and especially the solvency of Starbucks. Regulators
Cited: Nguyen, T. (n.d.). How Often Do Publicly Traded Companies Prepare Financial Statements for External Reporting Purposes? Chron. Web Starbucks Corporation Case Study Mai Dinh Intermediate Accounting A311 Indiana University – Purdue University Fort Wayne September 30, 2014