Question

On October 2, 2016, Starbucks Corporation reported, on its Form 10-K, the following (in millions): 2016 2015 Total expenses $18,497.0 $16,403.4 Operating income (4,171.9 ) 3,601.0 Net earnings 2,818.9 2,759.3 What amount of revenues did Starbucks report for the year ending October 2, 2016? A. $24,883.4 B. $25,208.8 C. $24,558.0 D. $21,315.9 E. None of the above

Answer 1

Answer:

D. $21,315.9

Explanation:

We know,

Total revenues - Total expenses = Net Income/Earnings

Given,

Total revenues = ?

Total expenses = $18,497.0

Net Income/Earnings = $2,818.9

Therefore, Total revenues - $18,497.0 = $2,818.9

Total revenues = $18,497.0 + $2,818.9

Total revenues = $21,315.9

Therefore, option D is the answer.

We should not consider operating income because we know, part of expenses is operating expenses. Alternatively, When we deduct operating expenses from gross profit or service revenue, we can get operating income.