LaToya Mason, Sherry Bertolozzi, & Carisa Bonsante
ACC 280-Principles of Accounting
April 4, 2011
Instructor Monica Walker
The business of McDonald’s restaurant was founded in 1940 by brothers Richard and Maurice McDonald in San Bernardino, California, and is considered the world’s largest hamburger chain (Wikipedia). The first McDonalds restaurant opened on April 15, 1955 in Des Plaines, Illinois by Ray Kroc. Ronald McDonald, however was not the original mascot, it was a man in a chef’s hat on top of a hamburger shaped head whose name was Speedee. Ronald McDonald became the mascot in 1967 when the company filed a U.S. ...view middle of the document...
Now days, McDonalds is open to the public 24 hours a day at some locations and at other locations, they are usually closed by 11pm with the drive-thru still open. With McDonald’s being around as long as it have, it is still the biggest fast food chain in the world.
According to www.mcdonalds.com, under the Under the Sarbanes-Oxley Act of 2002, the Audit Committee of the Board of Directors is responsible for the appointment, compensation and oversight of the work performed by the independent auditor engaged by McDonald’s Corporation. McDonald’s stock exchange is the New York Stock Exchange and their ticker symbol is MCD (McDonald’s).
As of 2009, McDonald’s cash and cash equivalents was $16.6 billion and in 2008, McDonald’s cash and cash equivalents was $5.8 billion. In 2009, McDonald’s total assets were $30,225 million and their total assets in 2008 were $28, 462 million and the assets should be presented in the following order: cash to cash equivalents, short-term investments, accounts and noted receivables, inventories, and prepaid expenses.
To operate the many restaurants’ affiliated with McDonald’s the company must have assets and they include equipment and property, cash and inventory. The current assets for 2008 were $3,518 million and in 2009 they were $3,416 million. These assets include cash, accounts and notes receivable, inventories at cost, prepaid expenses and other assets. In 2008, McDonald’s current property and equipment were $28,462 million in 2008 and $30,225 in 2009. If you look at the numbers after accumulated depreciation and amortization, the assets were $20,255 million in 2008 and in 2009, their property and equipments assets were $21,532 million. The majority of the property and equipment assets come from buildings and improvements on land owned or leased. The other assets include goodwill, miscellaneous, and investments in and advances to affiliates and these totaled $4,689 million in 2008 and $5,277 million in 2009. Their total assets combined for 2008 were $28,462 million and in 2009, they were $30,225 million. The two largest assets for McDonald’s in both 2008 and 2009 were the property and equipment and goodwill. According to the United States Securities and Exchange Commission Form 10-K 2009, goodwill is defined as the following “Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of acquired restaurant businesses. The Company’s goodwill primarily results from purchases of McDonald’s restaurants from franchisees and ownership increases in international subsidiaries or affiliates.
McDonald’s also has liabilities and these include; accounts payable, taxes, accrued interest, payroll and other liabilities and maturities of long-term debt. In 2008, the total current liabilities were $2,539 million and in 2009, they were $2,989 million. The accrued payroll and other liabilities were $1,460 million $1,659 in...