Question

Retrieve the Form 10-K for Papa John’s International for the year ending December 31, 2017. Papa John’s Form 10-K can be accessed through the SEC EDGAR database at https://www.sec.gov/Archives/edgar/data/901491/000155837018001176/pzza-20171231x10k.htm#Item2Properties_626380

Hints: You will need to search the financial statement footnotes to find some of the information. Also, the financial statements are in thousands, except for per share amounts. If a number is in thousands, please indicate this by writing out the full number or writing ‘(in thousands)’. Furthermore, you will not need the information before page 52 in Papa John’s Form 10-K.

1. As of December 31, 2017, what is Papa John’s allowance for doubtful accounts on its accounts receivable? On its notes receivable?

2. What is Papa John’s Goodwill at December 31, 2017?

3. Did Papa John’s current assets increase or decrease for 2017? By how much?

4. What inventory valuation method(s) (FIFO, LIFO, average cost, specific identification) does Papa John’s use?

5. What are the estimated useful lives that Papa John’s uses to depreciate its property and equipment? List the type of property and equipment and its estimated useful life.

6. As of December 31, 2017, what are Papa John’s future expected gross lease costs for each of the following time periods: 2018, 2019, 2020, 2021, 2022, and thereafter?

7. List the individual items and corresponding amounts that are included in Papa John’s Other Long-Term Liabilities at December 31, 2017.

8. How many shares of stock are a part of Papa John’s Treasury Stock at December 31, 2017?

9. What are Papa Johns’ income and other taxes payable at December 31, 2017?

10. Was the auditor’s opinion on Papa John’s financial statements unqualified, qualified, adverse, or a disclaimer?

Answer 1

1.) Accounts receivable allowance - NIL

Notes receivable allowance - $1047 thousands.

2.) Papa John’s Goodwill at December 31, 2017 is $86892 (in thousands).

3.) Yes, Papa John’s current assets increase or decrease for 2017 by 169994-145575 = $24419 (in thousands).

4.) Papa John’s use FIFO method for inventory valuation.

5.) Papa John's uses straight line method of depreciation

Property and equipment	Estimated useful life
Land	-
Buildings and improvements	20-40 years
Leasehold improvements	generally 5-10 years
Equipment and other	5-10 years

6.) Papa John’s future expected gross lease costs are :- ($ in thousands)

Year	Gross lease cost
2018	45421
2019	38807
2020	30956
2021	24756
2022	17896
Thereafter	56234

7.) Papa John’s Other Long-Term Liabilities at December 31, 2017    ($ in thousands)

Deferred compensation plan	28690
Insurance reserves	21995
Accrued rent	7129
Others	2332

8.) Papa John’s Treasury Stock at December 31, 2017 consists 10290 thousands shares.

9.) Papa Johns’ income and other taxes payable at December 31, 2017 is $10561 (in thousands).

10.) Auditor’s opinion on Papa John’s financial statements is unqualified.