The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.

Instructions

Use the companies’ financial information to answer the following questions.

a. What are the primary lines of business of these two companies as shown in their notes to the financial statements?

b. Which company has the dominant position in beverage sales?

c. How are inventories for these two companies valued? What cost allocation method is used to report inventory? How does their accounting for inventories affect comparability between the two companies?

d. What future accounting policy changes do the companies discuss related to revenue recognition?