Question

Analyze 10-K filings (the most recent) for PepsiCo and for Coca-Cola. Answer the following questions.

A. Which inventory method does each company use?

B. How do they account for their Accounts Receivables?

C. How do they value their inventory?

D. How do they account for and value their PPE?

E. Was there any significant changes in PPE for both companies?

F. How much working capital did each company have?

Answer 1

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		The most recent 10-K filings for PepsiCo is for the year ended December 28, 2019.
		The most recent 10-K filings for Coca-Cola is for the year ended December 31, 2019.
The answers are below:
Event	Item	PepsiCo	Coca Cola
A	Inventory method used	Average cost or first-in, first-out methods.	Average cost or first-in, first-out methods or, in limited instances, last-in, first-out (LIFO) methods.
B	Accounts Receivables accounted as	Net realizable value.	Net realizable value.
C	Inventory valued as	Lower of cost or net realizable value.	Lower of cost or net realizable value.
D	PPE accounted for and valued as	PPE are stated at cost. Depreciation is recorded principally by the straight-line method over the estimated useful lives of our assets, which are reviewed periodically. Land is not depreciated, and construction in progress is not depreciated until ready for service	Property, plant and equipment is recorded at historical cost. Depreciation and amortization are recognized on a straight-line basis over an asset’s estimated useful life. Land is not depreciated and construction in progress is not depreciated until ready for service.
E	Significant changes in PPE	Purchases of property, plant and equipment- $ 2,054 millions. Proceeds from disposals of property, plant and equipment- $ 978 millions.	Purchases of property, plant and equipment- $ 4,232 millions. Proceeds from disposals of property, plant and equipment- $ 170 millions.
F	Working capital in each company	Total Current assets: $ 20,411 millions less Total Current liabilities: $ 26,973 millions= Working capital of negative $ 6,562 millions.	Total Current assets: $ 17,645 millions less Total Current liabilities: $ 20,461 millions= Working capital of negative $ 2,816 millions.