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 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) Which company changed its accounting policies during 2006 which affected the consistency of the financial results from the previous year? What were these changes?