Finished goods. Other... Total inventories. 791 369 $3,266 851 348 $3,379 Required a. Identify the method Coca-Cola uses to report its inventories. Identify the method used for its cost basis. b. Is its method for the cost basis permitted under GAAP? Is it allowed for IRS income tax reporting?
Finished goods. Other... Total inventories. 791 369 $3,266 851 348 $3,379 Required a. Identify the method Coca-Cola uses to report its inventories. Identify the method used for its cost basis. b. Is its method for the cost basis permitted under GAAP? Is it allowed for IRS income tax reporting?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Dd2.
Transcribed Image Text:Real World Analysis An excerpt from the annual report of the Coca-Cola Company follows.
Inventories consist primarily of raw materials and packaging (which includes ingredients and supplies) and
finished goods (which includes concentrates and syrups in our concentrate operations and finished bever-
ages in our finished products operations). Inventories are valued at the lower of cost or net realizable value.
We determine cost on the basis of the average cost of first-in, first-out methods. Inventories consisted of the
following (in millions):
December 31
Raw materials and packaging
Finished goods.
Other.
Total inventories
Current Year
$2,106
791
369
$3,266
Prior Year
$2,180
851
348
$3,379
Required
a.
Identify the method Coca-Cola uses to report its inventories. Identify the method used for its cost basis.
b. Is its method for the cost basis permitted under GAAP? Is it allowed for IRS income tax reporting?
AD&J 10-89
Analyzing the Reporting of
Inventory LO1, 2
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