accounting questions about kellogs annual report for 2014 Accounting questions a

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accounting questions about kellogs annual report for 2014

Accounting questions about Kellogs annual report for 2014:

1. a) over how many years does Kellogg’s depreciate its building structures?

   b) what depreciation method is used?

2.  What does Kellogs consider to be a "cash equivalent?"

3. a) which inventory cost flow method does kellogs use?

   b) what was kelloggs inventory turnover ratio for the fiscal year ended 1-3-15?

4.  At the end of its fiscal year 2014, what percentage of kelloggs assets were in inventories?

Here is the link for the annual report:

http://s1.q4cdn.com/765937029/files/doc_financials/annual_reports/K_2014-Annual-Report_v001_q725z5.pdf

Explanation / Answer

1

(a) The depriciation year is for building structures is 50 years.

(b)

Assets are recorded at cost and depreciated over estimated useful lives using straight-line methods for financial reporting and accelerated methods, where permitted, for tax reporting.

2.

Highly liquid investments with remaining stated maturities of three months or less when purchased are considered cash equivalents .

3.

a

Inventories are valued at the lower of cost or market. Cost is determined on an average cost basis

b

Inventory turnover ratio

Cost of goods sold

÷ Average Inventory

9,517/1263.5

=7.53

Inventories (1,279 +1,248)/2

=1263.5

4

Inventories 1,279

Total assets $15,153

percentage of kelloggs assets in inventories

=1,279/15,153

=.084%

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