Answered: Pepsi co inc the parent company of…

Pepsi co inc the parent company of frito lay snack food and Pepsi beverage had the following current assets and current liabilities at the end of two recent years cash and cash equivalent $5,509

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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epsiCo, Inc. (PEP), the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Current Year(in millions) Previous Year(in millions) Cash and cash equivalents $21,243 $10,202 Short-term investments, at cost 8,540 5,297 Accounts and notes receivable, net 6,361 6,644 Inventories 2,814 2,801 Prepaid expenses and other current assets 1,602 1,863 Short-term obligations 6,613 3,718 Accounts payable 13,667 12,334 Determine the (1) current ratio and (2) quick ratio for both years. Round your answers to one decimal place. Current Year Previous Year 1. Current ratio 2. Quick ratio
P Company acquired the assets and assumed the liabilities of S Company on January 1, 2013, for $505,370 when S Company’s balance sheet was as follows: S COMPANYBalance SheetJanuary 1, 2013 Cash $94,842 Receivables 55,029 Inventory 111,504 Land 169,221 Plant and equipment (net) 474,560 Total $905,156 Accounts payable $44,244 Bonds payable, 9%, due 12/31/2018, Par 482,000 Common stock, $2 par value 122,000 Retained earnings 256,912 Total $905,156 Fair values of S Company’s assets and liabilities were equal to their book values except for the following: 1. Inventory has a fair value of $124,958. 2. Land has a fair value of $200,847. 3. The bonds pay interest semiannually on June 30 and December 31. The current yield rate on bonds of similar risk is 6%. Prepare the journal entry on P Company’s books to record the acquisition of the assets and assumption of the liabilities of S Company. (Round present value factor…
On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: ww www Minor Company Balance Sheet wwww n n Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable Capital Acc. Receivable 80,000 Inventory Buildings(net) Equipment(net) Patents Trademarks 120,000 50,000 30,000 5,000 10,000 $335,000 ww An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. ww w
PepsiCo, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had thefollowing current assets and current liabilities at the end of two recent years: Current Year Previous Year (in millions) (in millions)Cash and cash equivalents $ 6,297 $ 4,067Short-term investments, at cost 322 358Accounts and notes receivable, net 7,041 6,912Inventories 3,581 3,827Prepaid expenses and other current assets 1,479 2,277Short-term obligations 4,815 6,205Accounts payable 12,274 11,949a. Determine the (1)…
Selected financial data regarding current assets and current liabilities for ACME Corporation and Wayne Enterprises, are as follows: ($ in millions) ACME Corporation Wayne Enterprises Current assets: Cash and cash equivalents $519 $185 Current investments 7 461 Net receivables 618 106 Inventory 10, 645 7,609 Other current assets 1,251 155 Total current assets $13,040 $8,516 Current liabilities: Current debt $7,621 $4,464 Accounts payable 1,707 961 Other current liabilities 1, 148 2,552 Total current liabilities $10,476 $7,977 Required: 1-a. Calculate the current ratio for ACME Corporation and Wayne Enterprises. 1-b. Which company has the more favorable ratio? 2-a. Calculate the acid-test (quick) ratio for ACME Corporation and Wayne Enterprises. 2-b. Which company has the more favorable ratio?
Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year(in millions) Previous Year(in millions) Cash and cash equivalents $3,155 $3,047 Short-term investments, at cost 2,241 5,659 Accounts and notes receivable, net 7,123 5,803 Inventories 1,445 1,926 Prepaid expenses and other current assets 481 712 Short-term obligations 385 4,089 Accounts payable 9,245 9,101 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio 2. Quick ratio
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Sun City Corporation's end-of-year balance sheet consisted of the following amounts: Cash Property, plant, and equipment Capital stock Retained earnings $ 25,000 70,000 100,000 Ob. $200,000 Oc. $165,000 Od. $100,000 7 Accounts receivable Long-term debt Accounts payable Inventory What amount should Sun City report on its balance sheet for total assets? Oa. $95,000 $70,000 40,000 20,000 35,000
iysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year Prevlous Year (In mllllons) (In milllons) Cash and cash equivalents $1,534 $1,533 Short-term investments, at cost 1,090 2,847 Accounts and notes receivable, net 3,464 2,921 Inventories 2,283 1,523 Prepaid expenses and other current assets 761 563 Short-term obligations 304 3,233 Accounts payable 7,306 7,197 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Prevlous Year 1. Current ratio 2.4 2.2 X 2. Quick ratio 0.8 2.0 X
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales $ 887.00 Cost of goods sold 747.00 Depreciation 37.00 Earnings before interest and taxes (EBIT) $ 103.00 Interest expense 18.00 Income before tax $ 85.00 Taxes 17.85 Net income $ 67.15 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Current assets $ 375 $ 324 Long-term assets 270 228 Total assets $ 645 $ 552 Liabilities and shareholders’ equity Current liabilities $ 200 $ 163 Long-term debt 114 127 Shareholders’ equity 331 262 Total liabilities and shareholders’ equity $ 645 $ 552 The company’s cost of capital is 8.5%. Required: Calculate Watervan’s economic value added (EVA). Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. What is the company’s return on capital? (Use start-of-year rather than average capital.) Note: Do not…
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales $ 887.00 Cost of goods sold 747.00 Depreciation 37.00 Earnings before interest and taxes (EBIT) $ 103.00 Interest expense 18.00 Income before tax $ 85.00 Taxes 17.85 Net income $ 67.15 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Current assets $ 375 $ 324 Long-term assets 270 228 Total assets $ 645 $ 552 Liabilities and shareholders’ equity Current liabilities $ 200 $ 163 Long-term debt 114 127 Shareholders’ equity 331 262 Total liabilities and shareholders’ equity $ 645 $ 552 The company’s cost of capital is 8.5%. Required: What is the company’s return on capital? (Use start-of-year rather than average capital.) Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. P.S - Answer is not 17.26%.
The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance Sheet as of December 31, 2021 (millions of dollars) Assets Cash and equivalents Accounts receivable Inventories Total current assets. Net plant and equipment Total assets EBIT Interest EBT Taxes (25%) Net Income Common dividends paid Earnings per share Liabilities and Equity $ 20 Accounts payable 470 Accruals Balances, 12/31/20 2021 Net Income Cash dividends Addition to RE 890 Notes payable $ 1,380 2,520 Davidson Corporation: Income Statement for Year Ending December 31, 2021 (millions of dollars) Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Total current liabilities Long-term bonds Total liabilities Common stock (100 million shares) Retained earnings Common equity $ 3,900 Total llabilities and equity $ Shares $ $ $ $ 140 250 220 610 1,510 $ 2,120 280 $ 1,500 $ 1,780 $ 3,900 $5,500 4,470 $ 1,030 $ $ a. Construct the…