Horngren's Accounting, Student Value Edition (12th Edition)
12th Edition
ISBN: 9780134487151
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 24, Problem 24.1TIATC
Tying It All Together Case 24-1
Before you begin this assignment, review theTying It All Together feature in the chapter. It will also be helpful if you review PepsiCo's 2015 annual report
(https://www.sec.gov/Archives/edgar/data/77476/000007747616000066/pepsic
o201510-k.htm).
PepsiCo, Inc., a leading global food and beverage company, organizes itself into six reportable segments or divisions: Frito-Lay North America (FLNA),Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America (LA), Europe Sub-Saharan Africa (ESSA), and Asia, Middle East and North Africa (AMENA).
Requirements
- Review the 2015 annual report for PepsiCo and provide a brief summary about each of the different segments. See Part I, Item 1, Our Operations.
- What are some advantages that PepsiCo has from decentralization?
- What are some disadvantages that PepsiCo has from decentralization?
- Review the 2015 annual report for PepsiCo, and determine the amount of operating profit in each of the different segments for 2015. Use Notes to Consolidated Financial Statements, Note 1.
- Review the 2015 annual report for PepsiCo, andcalculate the
return on investment (ROI) for the 6 segments for 2015. Use Notes to Consolidated Financial Statements, Note 1. - In terms of ROI, rank the 6 segments from most profitable to less profitable. How does this ranking compare to the ranking by operating income?
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Mega Company believes the price of oil will increase in the coming months. Therefore, it decides to purchase call options on oil as a price-risk-hedging device to hedge the expected increase in prices on an anticipated purchase of oil.
On November 30, 20X1, Mega purchases call options for 14,000 barrels of oil at $30 per barrel at a premium of $2 per barrel with a March 1, 20X2, call date. The following is the pricing information for the term of the call:
Date
Spot Price
Futures Price (for March 1, 20X2, delivery)
November 30, 20X1
$ 30
$ 31
December 31, 20X1
31
32
March 1, 20X2
33
The information for the change in the fair value of the options follows:
Date
Time Value
Intrinsic Value
Total Value
November 30, 20X1
$ 28,000
$ –0–
$ 28,000
December 31, 20X1
6,000
14,000
20,000
March 1, 20X2
42,000
42,000
On March 1, 20X2, Mega sells the options at their value on that date and acquires 14,000 barrels of oil at the spot price. On June 1, 20X2, Mega sells the…
Chapter 24 Solutions
Horngren's Accounting, Student Value Edition (12th Edition)
Ch. 24 - Prob. 1QCCh. 24 - Which is not one of the potential advantages of...Ch. 24 - The Quaker Foods division of PepsiCo is most...Ch. 24 - Which of the following is not a goal of...Ch. 24 - Which of the following balanced scorecard...Ch. 24 - The performance evaluation of a cost center is...Ch. 24 - Prob. 7QCCh. 24 - Prob. 8QCCh. 24 - Prob. 9QCCh. 24 - Prob. 10QC
Ch. 24 - Prob. 11AQCCh. 24 - Prob. 1RQCh. 24 - Prob. 2RQCh. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - Prob. 9RQCh. 24 - 10. Explain the difference between a centralized...Ch. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 14RQCh. 24 - Prob. 15RQCh. 24 - Prob. 16RQCh. 24 - List the four types of responsibility centers, and...Ch. 24 - What is a performance evaluation system?Ch. 24 - What are the goals of a performance evaluation...Ch. 24 - Prob. 20RQCh. 24 - Prob. 21RQCh. 24 - Prob. 22RQCh. 24 - Prob. 23RQCh. 24 - Prob. 24RQCh. 24 - Prob. 25RQCh. 24 - Prob. 26RQCh. 24 - Prob. 27RQCh. 24 - Prob. 28RQCh. 24 - Prob. 29RQCh. 24 - Prob. 30RQCh. 24 - Prob. 31RQCh. 24 - Prob. 32RQCh. 24 - Prob. 33RQCh. 24 - What is a transfer price?Ch. 24 - Prob. 35ARQCh. 24 - Prob. 36ARQCh. 24 - Prob. S24.1SECh. 24 - Prob. S24.2SECh. 24 - Prob. S24.3SECh. 24 - Prob. S24.4SECh. 24 - Prob. S24.5SECh. 24 - Prob. S24.6SECh. 24 - Describing the balanced scorecard and identifying...Ch. 24 - Prob. S24.8SECh. 24 - Prob. S24.9SECh. 24 - Prob. S24.10SECh. 24 - Prob. S24.11SECh. 24 - Prob. S24.12SECh. 24 - Prob. S24A.13SECh. 24 - Prob. E24.14ECh. 24 - Prob. E24.15ECh. 24 - Prob. E24.16ECh. 24 - E24-17 Computing product costs in traditional and...Ch. 24 - Identifying responsibility centers after...Ch. 24 - Prob. E24.19ECh. 24 - Prob. E24.20ECh. 24 - Prob. E24.21ECh. 24 - Prob. E24.22ECh. 24 - Prob. E24.23ECh. 24 - Prob. E24.24ECh. 24 - Prob. E24.25ECh. 24 - Prob. E24.26ECh. 24 - Prob. P24.27APGACh. 24 - Prob. P24.28APGACh. 24 - Prob. P24.29APGACh. 24 - Prob. P24.30APGACh. 24 - Prob. P24.31APGACh. 24 - Prob. P24.32BPGBCh. 24 - Prob. P24.33BPGBCh. 24 - Prob. P24.34BPGBCh. 24 - Using ROI and Rl to evaluate investment centers...Ch. 24 - Prob. P24.36BPGBCh. 24 - Prob. P24.37CTCh. 24 - Continuing Problem
P24-38 Using ROI and Rl to...Ch. 24 - Comprehensive Problem for Chapters 22-24 The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24 The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Comprehensive Problem for Chapters 22-24
The...Ch. 24 - Tying It All Together Case 24-1 Before you begin...Ch. 24 - Prob. 24.1DCCh. 24 - Prob. 24.1EICh. 24 - Fraud Case 24-1 Everybody knew Ed McAlister was a...
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