Reference no: EM131686892

Assignment: Financial Reporting on the Internet

Case study 1: PepsiCo

The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.

PepsiCo is a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. Through our operations, authorized bottlers, contract manufacturers and other third parties, PepsiCo make, market, distribute and sell a wide variety of convenient and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories. Performance with Purpose is our goal to deliver sustained value by providing a wide range of beverages, foods and snacks, from treats to healthy eats; finding innovative ways to minimize our impact on the environment and lower our costs through energy and water conservation as well as reduce our use of packaging material; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities in which we operate. PepsiCo was again recognized for its leadership in this area in 2014 by earning a place on the prestigious Dow Jones World Index for the eighth consecutive year and on the North America Index for the ninth consecutive year.

Access the PepsiCo home web page From PepsiCo home page and then "The Company", click on "FINANCIAL INFORMATION", followed by "Reports and results", then select the year 2015 to display and download the "Annual report - 10k" 2016 on Form PDF.

Instructions Use the annual report and accounts of 2016 to answer the following questions:

1- What are PepsiCo vision, mission and guiding principle? (may need search in the web)

2- Companies tend to use the consolidation financial statements rather than Separate financials. Identify the advantages of consolidating the financial statements?

3- Demand for the company products may be adversely affected by changes in consumer preferences which may affect significantly demand and could adversely affect our business, financial condition or results of operations. How do the company manage this risk?

4- Write a memo, in no more than 300 words, explaining: (Hint: Explain and support your memo by suitable figures from the annual report.)

a. There are two type of leases in accounting explain them and mention the GAAP criteria to consider the lease as capital "finance" lease explain them in details.

b. Explain the difference between the operating lease and capital lease accounting wise?

c. How much is the operating lease obligation in total?

5- In the annual report PepsiCo mentioned that they measure certain asset and liabilities using fair value measurement, according to FASB there are three level hierarchy for the fair value measurement technique explain them? Mention example from the balance sheet for asset and liabilities that were measured at fair value for each level if available.

6- According to ISAB, Debt investments are accounted either by the amortize cost or by fair value method. To identify the method used there is certain model. Please explain the model and its criteria.

7- Write a memo, in no more than 200 words, explaining: (Hint: Explain and support your memo by suitable figures from the PepsiCo annual report.)

a- How do the company first account and assign the goodwill?

b- What are the three categorization for intangible assets and are they amortized or impaired (provide examples)?

c- How much amortization did PepsiCo report from the intangible assets in 2016?

Case study: two

Madison Company has the following transactions:

A. 1 January 2015, issued 40,000 ordinary shares for cash at par value of $1 and 14 per share. Record issuance transaction.

B. issued 1000 ordinary shares of $10 par value, and 1000 preference shares of $10 par value for lump sum of $1,200,000.

Required:

• Prepare the journal enry for the issuance when the fair value of the ordinary shares is $600 each and the fair value of the preference share is $700 each.

• Prepare the Journal enry for the issuance when only the fair value of the ordinary is known and its $750.

In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your work: