FINANCIAL REPORTING PROBLEM: PepsiCo
The financial statements of PepsiCo are presented in Appendix A. The statements contain the following selected accounts for the year ended, 2006 stated in millions of dollar
|
Accounts Payable |
$6,496 |
Income Taxes Payable |
$90 |
|
Accounts Receivable |
3,725 |
Interest Expense |
239 |
|
Property, Plant, and Equipment |
9,687 |
Inventory |
1,926 |
Instructions
(a) Answer the following questions.
(1) What is the increase and decrease side for each account?
(2) What is the normal balance for each account?
(b) Identify the probable other account in the transaction and the effect on that account when:
(1) Accounts Receivable is decreased.
(2) Accounts Payable is decreased.
(3) Inventory is increased.
(c) Identify the other accounts (s) that ordinarily would be involved when:
(1) Interest Expense is increased.
(2) Property, Plant, and Equipment is increased.
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