Captain of a boat knows that a lighthouse on the coast is 100 ft tall. If she measures the angle of elevation to be 2 degrees, how far is the boat from the coast? Solution The 100ft lighthouse forms the opposite side of a right angled triangle, and the distance of the boat from the cost is the adjacent side, let it be x as the angle of elevation is 2 degrees, we have tan 2 = opposite side/ adjacent side = 100 / x that is tan 2 = 0.035 = 100 / x , therefore 0.035x = 100, thus we get x= 100/0.035 = 2,875.14 ft thus distance of the boat from the coast is 2,875.14 ft.

1. Case 5-95
Research and Analysis Using the Annual Report
Obtain Whole Foods's Fiscal 2011 10-K (filed Nov. 23, 2011) through the "Investor Relations"
portion of its website (do a web search for Whole Foods investor relations). Once at the Investor
Relations section of the website, look for "SEC Filings." When you see the list of all the filings,
either filter for the "Annual Filings" or search for "10-K." Another option is to go to
www.sec.gov and click "Search for Company Filings" under "Filings & Forms."
Required:
1. Look at the "Accounts Receivable" heading to Note 2 (Summary of Significant Accounting
Policies). Do you think Whole Foods uses the percentage of credit sales method or the aging
method to estimate bad debt expense?
2. Looking at the same note, what was Whole Foods's allowance for doubtful accounts at fiscal
year end 2010 and 2011? Enter amounts in full (for example, 3.87 million would be entered as
3,870,000).
3. Was a larger percentage of the gross accounts receivable considered uncollectible at fiscal
year end 2010 or 2011?
4. Calculate Whole Foods’s receivables turnover for fiscal 2010 and 2011 (Accounts Receivable,
net, was $104,731 at the end of fiscal 2009). Round your answers to two decimal places.
If the industry average for receivables turnover is 116.77, how do you evaluate their efficiency
with receivables?
The input in the box below will not be automatically graded, but may be reviewed and
considered by your instructor.
5. Calculate Whole Foods’s gross profit margin, operating margin, and net profit margin for
fiscal 2010 and 2011. Round your answers to two decimal places.
6. If the industry average for the gross profit ratio is 33.32%, what sort of strategy do you think
Whole Foods is pursuing?
7. Evaluate the trend of Whole Foods’s operating margin and net profit margin.
Relate the trend to the industry averages of 4.67% and 2.91%, respectively.
The input in the box below will not be automatically graded, but may be reviewed and
considered by your instructor.Allowance for
Doubtful AccountsDecember 31, 2010$December 31, 2011$
Solution
Answer to question no.1:

2. In the notes it is specified that allowance for doubtful debts is calculated based on the historical
experience, customer credit risk and application of the specific identification method.
From the above statement, it can be interpreted that the company seems to follow aging method
to identify the bad debts. First aging of customers is done, then customres are idetified from
whom amount cannot be recovered and then allowance is made for doubtful debts.
Answer for question no.2:
In the note it is mentioned that allowance for doubtful debts is totaled approximately $2.2 million
in both the fiscal years 2011 and 2010. From this statement it can be interpreted that allowance
for doubtful accounts is $2.2 million.
Answer for question no.3:
Accounts receivable for 2010 is 133,346 expressed in thousands and for 2011 is 175,310
Looking at the % of allowance for doubtful debts it is clear that only a small % of accounts is
classified as non collectible.
Answer for question no.4:
Formula for receivables turnover ratio= net credit sales/Average accounts receivables
It is given in the question that accounts receivable for 2009 is 104,731 (in
thousands.)YearAllowance for doubtful accounts20102.2 million20112.2 million.