https://www.sec.gov/Archives/edgar/data/829224/000082922416000083/sbux-1022016x1
ID: 2575154 • Letter: H
Question
https://www.sec.gov/Archives/edgar/data/829224/000082922416000083/sbux-1022016x10xk.htm
Chapter 10 discusses the components of shareholder’s (or owner’s) equity including retained earnings, stock (common and/or preferred), and additional paid in capital or APIC (common and/or preferred). Review the 10K of Starbucks and answer the following:
List the number of authorized shares of Starbucks by type
How many of these authorized shares are outstanding at the end of 2014?
What is the par value of common stock?
How many shares did Starbucks repurchase during 2014?
Was this stock retired or held in treasury for reissue? How do you know?
Explanation / Answer
Authorised shares:
2.4 billion shares of common stock
7.5 million shares of preferred stock
Outstanding at the end of 2014:
749.5 million shares of common stock outstanding
Par value of common stock= $0.001
Shares repurchased in 2014= 10.5 Million
This stock is retired, as per the accounting policy of starbucks:
shares repurchased are retired and not displayed separately as treasury stock on the financial statements. Instead, the par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is deducted from additional paid-in capital and from retained earnings, once additional paid-in capital is depleted.
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