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ure https//edugen wileyplus /mainfr.uni l Help I Contact Is1 Log Ot LUS Kieso, Intermediate Accounting, 16e INTERMEDIATE FINANCIAL ACCOUNTING (ACCT 221/312/313) y & Practice Assignment Gradebook ORION Downloadable eTextbook Assignment RCES Comparative Analysis Case e 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 fina ing statements, are available online. xam Use the companies' financial information to answer the following questions. What method of computing net cash provided by operating activities does Coca-Cola use? What method does PepsiCo use? What were the amounts of cash provided by operatin activities reported by Coca-Cola and PepsiCo in 20147 (Enter your answers in millions.) The Coca-Cola CompanyPepsiCo, Inc. 12 Method of computing Net cash provided by operating activities n 03 Study What was the most significant item reported by Coca-Cola and PepsiCo in 2014 in their investing activities sections? What is the most significant item reported by Coca-Cola and in 2014 in their financing activities sections? The Coca-Cola Company PepsiCo, Inc The most significant investing activities items in 2014: 0458 PM 9/712018 ere to search

Explanation / Answer

(a)
Coca-Cola’s and Pepsi Co.'s both used the indirect method to compute net cash provided by operating activities. With indirect method, we start with Net Income and convert it Net Cash from Operating Activities.
2014- Coca-Cola = $10,615 million
2014- PepsiCo = $10,506 million
(b)
In 2014, Coca-Cola most significant item reported in their investing activities were the purchase of investments (17,800 million). In 2014, Pepsi most significant item reported in their investing activities were short-term investments (6,305 million).
In 2014, Coca-Cola most significant item reported in their financing activities section is issuance of debt (41,674 million). In 2014, Pepsi most significant item reported in their financing activities section is shares repurchases – common (5,012 million)
(c)
Depreciation and Amortization is reported under the operating activities. Depreciation and amortization appear in the operating section of these two companies because they both use the indirect method to compute net cash provided by operating activities. The indirect method adjusts accrual accounts to equal out the cash accounts; it adds it back to the net income; this shows a better picture of the inflow and outflow of cash. Coca-Cola 2014 depreciation and amortization amount is $1,976 million. Pepsi 2014 depreciation and amortization is $2,625 million.

(d)
1.Current cash debt coverage.
Current Cash debt coverage= N.C from Operating activities/ Average Current Liabilities
Coke:
= $10,615/ $32,374
=.3279
= 32.79%

Pepsi:
Current Cash debt coverage= N.C from Operating activities/ Average Current Liabilities
= $10,506/$18,092
= .5807
= 58.07%

2.Cash debt coverage.

Coke:
Cash Debt Coverage= N.C from Operating Activities/ Total Liabilities
= $10,615/ $61462
= .1727
= 17.27%

Pepsi:
Cash Debt Coverage= N.C from Operating Activities/ Total Liabilities
= $10,506/ $52,961
= .1984
=19.84%

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