1. Referring to Note 1, what is the nature of JFC's operations?

Jollibee Foods Corporation Doing business under the name and style of Jollibee (formerly Jollibee Foods
Corporation) was incorporated in the Philippines and registered with the Philippine Securities and
Exchange Commission (SEC) on January 11, 1978. The Parent Company and its subsidiaries (collectively
referred to as “the Jollibee Group”) and affiliates are involved primarily in the development, operations
and franchising of quick service restaurants (QSRs) under the trade names “Jollibee”, “Chowking”,
“Greenwich”, “Red Ribbon”, “Yong He King”, “Hong Zhuang Yuan”, “Mang Inasal”, “Burger King”,
“Highlands Coffee”, “Pho24”, “Hard Rock Cafe”, “Dunkin’ Donuts”, “Smashburger”, “Tim Ho Wan” and
“Tortas Frontera”. The other activities of the Jollibee Group include manufacturing and property leasing
in support of the quick service restaurant systems and other business activities (see Notes 2 and 5).
The corporate life of the Parent Company is fifty (50) years from the date of incorporation or until 2028.

2. What note(s) is(are) the company’s disclosure(s) on its accounts payable and other current
liabilities (1 point)?

Current Liabilities

Trade payables and other current liabilities and contract liabilities (Notes 16, 30 and 31)

Current portion of:

Long-term debt (Notes 18, 30 and 31)

Operating lease payables (Notes 29, 30, 31 and 32)

Liability for acquisition of a business (Notes 11, 30 and 31)

3. What are the company’s trade payables (1 point)?

3. How long is the normal payment period (credit term) of trade payables (1 point)?
Trade payables to suppliers are noninterest-bearing and are normally settled on a 30 to 60-day term.

Accrued expenses are noninterest-bearing and are normally settled within the next financial year. Other
accrued liabilities presented under “Service fees and others” consist of charges related to
representations and other miscellaneous expenses.

4. What are the company’s other current liabilities (give at least 5 items for a maximum 3 points)?

Other current liabilities consist of staled checks, amounts payable for mascots and various subscriptions
in newspapers given to customers as a complementary to their meals.

Customers’ deposits pertain to security deposits from operating leases with franchisees, which are
refundable at the end of the lease term, deposits for kiddie party packages and deposits from
franchisees for the sale of store assets.

Dividend payable

5. Enumerate (copy the disclosure of ) at least three (3) descriptions or conditions of accounts payable
and other current liabilities (1 point each disclosure, maximum of 3 points).

 Trade payables to suppliers are noninterest-bearing and are normally settled on a 30 to 60-day
term.
 Accrued expenses are noninterest-bearing and are normally settled within the next financial
year.
 Other accrued liabilities presented under “Service fees and others” consist of charges related to
representations and other miscellaneous expenses.
 Customers’ deposits pertain to security deposits from operating leases with franchisees, which
are refundable at the end of the lease term, deposits for kiddie party packages and deposits
from franchisees for the sale of store assets.
 Accretion of interest on customer’s deposits amounted to P=0.6 million, P=13.2 million and
 P=20.4 million in 2018, 2017 and 2016, respectively (see Note 23).
 Other current liabilities consist of staled checks, amounts payable for mascots and various
subscriptions in newspapers given to customers as a complementary to their meals.
 Contract liabilities pertains to deferred revenue and unearned revenue from gift certificates
from international operations.

6. What is the nature of the company's provisions (1 point)?

The Jollibee Group is involved in litigations, claims and disputes which are normal to its business. This
matter is significant to our audit because the estimation of the potential liability resulting from these
litigations, claims and disputes requires significant management judgment. The inherent uncertainty
over the outcome of these matters is brought about by the differences in the interpretation and
application of laws and rulings.

These include estimates of legal services, settlement amounts and other costs of claims made against
the Jollibee Group. Other information on the claims is not disclosed as this may prejudice the Jollibee
Group’s position on such claims (see Note 29).