What information is provided in McDonald’s basic financial statements? Original blog posting (August 22, 2017)

McDonald’s Corporation Has more than $31 billion in assets Started in 1940 as a BBQ restaurant in California In 1948, switched to burgers, shakes, potato chips, and pies Golden Arches believed to be most recognizable symbol in the world

Income statement

Statement of retained earnings

Balance sheet, page 1

Balance sheet, page 2

Statement of cash flows

Question 1 What form of business organization is McDonald’s? How do you know?

Question 2 Identify the line item that flows from the income statement to the statement of retained earnings.

Question 3 Identify the line item that flows from the statement of retained earnings to the balance sheet.

Question 4 Identify the line item that flows from the balance sheet to the statement of cash flows.

Question 5 Did McDonald’s have net income or net loss for 2016? Over what period of time was this amount earned?

Question 6 Write the accounting equation for McDonald’s as of December 31, 2016.

Question Recap What form of business organization is McDonald’s? How do you know? Identify the line item that flows from the income statement to the statement of retained earnings. Identify the line item that flows from the statement of retained earnings to the balance sheet. Identify the line item that flows from the balance sheet to the statement of cash flows. Did McDonald’s have net income or net loss for 2016? Over what period of time was this amount earned? Write the accounting equation for McDonald’s as of December 31, 2016.

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu