The financial statements of PepsiCo are presented in Appendix A. The statements contain the following selected accounts for the year ended, 2006 stated in millions of dollars.

Instructions
(a) Answer the following questions.
(1) What is the increase and decrease side for each account?
(2) What is the normal balance for each account?
(b) Identify the probable other account in the transaction and the effect on that account when:
(1) Accounts Receivable is decreased.
(2) Accounts Payable is decreased.
(3) Inventory is increased.
(c) Identify the other account(s) that ordinarily would be involved when:
(1) Interest Expense is increased.
(2) Property, Plant, and Equipment isincreased.

Transcribed Image Text:

Accounts Payable Accounts Receivable $6,496 Income Taxes Payable 3,725 Interest Expense 90 239 1,926 Property, Plant, and Equipment 9,687 Inventory