Question

Restaurant Brands International Inc. (RBI)describes itself as follows in its first footnote: "We franchise and operate quick service restaurants serving premium coffee and other beverage and food products under the Tim Hortons brand, fast food hamburgers principally under the Burger King brand, and chicken under the Popeyes brand. We are one of the world’s largest quick service restaurant companies as measured by total number of restaurants. As of December 31, 2019, we franchised or owned 4,932 Tim Hortons restaurants, 18,838 Burger King restaurants, and 3,316 Popeyes restaurants, for a total of 27,086 restaurants, and operate in more than 100 countries and U.S. territories. Approximately 100% of current system-wide restaurants are franchised."

Use the following information to provide the adjusting journal entry that RBI should have made on Dec. 31,2019. Assume that RBI makes adjusting entries once a year on Dec. 31.

1. RBI’s property and equipment depreciated $185 million during 2019.  

Account Title	Debit	Credit

2. On January 1, 2019, RBI received $252 million for gift cards to be used evenly over the next three years. On January 1, RBI made the following journal entry:

Dr. Cash			252 million
	Cr. Unearned Revenue			252 million

RBI did not make any journal entries related to the Unearned Revenue after the initial journal entry shown above. What adjusting journal entry should RBI make on December 31, 2019 related to the unearned revenue?

Account Title	Debit	Credit

3. On March 1, 2019, RBI paid $48 million for future advertising that will be released over the subsequent 12-month period (i.e., March 1, 2019 to February 29, 2020). On March 1, RBI made the following journal entry:

Dr. Prepaid Advertising			48 million
	Cr. Cash			48 million

RBI did not make any journal entries related to the prepaid advertising after the initial journal entry shown above. What adjusting journal entry should RBI make on December 31, 2019 related to the prepaid advertising?

Account Title	Debit	Credit

4. RBI receives a utility bill every four weeks for the previous four weeks. On January 25, 2020, RBI received a bill of $36 million covering the first three weeks of 2020 and the last week of 2019. Assuming that utilities are used evenly over the period, what adjusting journal entry should RBI make on December 31, 2019 related to this future utility bill?

Account Title	Debit	Credit

5. At the end of 2019, RBI owed employees $790 million related to work completed (but not yet paid) during 2019. What adjusting journal entry should RBI make on December 31, 2019 related to these wages owed to employees?

Account Title	Debit	Credit

6. At the end of 2019, RBI calculates that it has earned but not yet received or recorded $527 million of sales on account. What adjusting journal entry should RBI make on December 31, 2019 related to the sales on account?

Account Title	Debit	Credit

7. On January 1, 2019, RBI had $60 million in Supplies, and they purchased $88 million more in Supplies during 2019. A year-end measurement of RBI’s Supplies indicates that they have $52 million worth of Supplies remaining as of December 31, 2019. If RBI did not make journal entries when they used Supplies during 2019, what adjusting journal entry should RBI make related to its Supplies on December 31, 2019?

Account Title	Debit	Credit

Answer 1