Question

Required:     Answer the following questions based on your examination of the Coca Cola Company 2016 10-K (pdf file is on D2L). Answers should be turned in on a scantron. This project should be completed on an individual basis.


1.   What assets and liabilities does Coca-Cola adjust to fair value?
a.   All financial instruments
b.   All financial assets
c.   Investments in equity and debt securities classified as trading or available-for-sale and derivative financial instruments
d.   Derivative financial instruments

2.   What is the dollar value of 12/31/16 asset fair value measurements using the Level 1 fair value hierarchy? Level 2? Level 3?
a.   $4,098MM, 5,948MM, and 121MM, respectively
b.   $1,861MM, 5,612MM, and 143MM, respectively

c.   $384MM, 6,413MM, and 513MM, respectively

d.   $4,051MM, 3,856MM, and 16,260MM, respectively

3.   List the three types of risks Coca-Cola states it tries to mitigate through the use of derivatives?   
a.   foreign currency exchange rate risk
b.   commodity price risk
c.   interest rate risk
d.   All the above

4.   What is the total asset dollar amount of derivative instruments designated as hedging instruments that Coca-Cola included in its 12/31/16 balance sheet?    
a.   $178MM
b.   $317MM
c.   $109MM
d.   $565MM

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5.   What is the total liability dollar amount of derivative instruments designated as hedging instruments that Coca-Cola included in its 12/31/16 balance sheet?    
a.   $178MM
b.   $317MM
c.   $109MM
d.   $565MM

6.   What is the total asset dollar amount of derivative instruments not designated as hedging instruments that Coca-Cola included in its 12/31/16 balance sheet?   
a.   $178MM
b.   $317MM
c.   $109MM
d.   $565MM

7.   What types of Asset derivatives, designated as hedging instruments, are included in the 12/31/16 balance sheet?   
a.   Foreign currency contracts and interest rate contracts
b.   Foreign currency contracts, commodity contracts, and interest rate contracts
c.   Foreign currency contracts, commodity contracts, and other derivative instruments
d.   Foreign translation contracts

8.   Do you see any evidence that Coca-Cola has capital leases?   
a.   Yes
b.   No

9.   What are the future minimum payments for operating leases?
a.   $176MM
b.   $10,635MM
c.   $683MM
d.   $ 0M

10.   What were employer contributions by Coca-Cola into its pension plan in 2016?
a.   $8,371MM
b.   6,061MM
c.   8,371MM
d.   718 MM

11.   How much did the pension plan pay out in benefits?
a.   $270MM
b.   $76MM
c.   $61MM
d.   $1,057MM
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12.   What were actuarial gains/ losses during 2016 for the pension plan?
a.   $441MM gain
b.   $441MM loss
c.   $718MM gain
d.   $718MM loss

13.   What were the current and deferred tax expense for Coca-Cola in 2016?
a.   $3,941MM current, and $(4,039)MM deferred
b.   $2,442MM current, and $(856)MM deferred
c.   $2,166MM current, and $73 MM deferred
d.   $1,567MM current, and $7,758MM deferred

14.   Looking at the Income tax footnote detail, what were gross deferred tax assets and valuation allowances at 12/31/16?
a.   $4,471MM in deferred tax assets with a $530MM valuation allowance
b.   $7,980 deferred tax assets with a $0MM valuation allowance
c.   $4,039 deferred tax assets with a $530MM valuation allowance
d.   $168MM in deferred taxes with a $302MM valuation allowance

15.   Did that Coca-Cola’s effective tax rate increase or decrease from 2015 to 2016?   
a.   Increase
b.   Decrease

Answer 1

Answer to first 4 multi-choice questions as per policy