The financial statements of The Coca-Cola Company and PepsiCo, Inc. can be accessed at the book’s website.
Instructions
Use information found at the book’s website to answer the following questions.
(a) What are the amounts of Coca-Cola’s and PepsiCo’s provision for income taxes for the year 2006? Of each company’s 2006 provision for income taxes, what portion is current expense and what portion is deferred expense?
(b) What amount of cash did Coca-Cola and PepsiCo for income taxes pay in 2006?
(c) What was the U.S. federal statutory tax rate in 2006? What was the effective tax rate in 2006 for Coca-Cola and PepsiCo? Why might their effective tax rates differ?
(d) For the year-end 2006, what amounts were reported by Coca-Cola and PepsiCo as (a) gross deferred tax assets and (b) gross deferred tax liabilities?
(e) Do either Coca-Cola or PepsiCo disclose any net operating loss carrybacks and/or carryforwards at year-end 2006? What are the amounts, and when do the carryforwards expire?