The cost of the fine european mixers is expected to

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The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Natalie must choose a cost flow assumption for her mixer inventory. CONTINUING COOKIE CHRONICLE w w w . w i l e y . c o m / c o l l e g e / w e y g a n d t Go to the book’s companion website, , to see the completion of this problem. PDF Watermark Remover DEMO : Purchase from to remove the watermark
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Instructions Answer the following questions. Complete the requirements in millions of dollars, as shown in PepsiCo’s annual report. (a) What did PepsiCo report for the amount of inventories in its consolidated balance sheet at December 29, 2007? At December 30, 2006? (b) Compute the dollar amount of change and the percentage change in inventories between 2006 and 2007. Compute inventory as a percentage of current assets at December 29, 2007. (c) How does PepsiCo value its inventories? Which inventory cost flow method does PepsiCo use? (See Notes to the Financial Statements.) (d) What is the cost of sales (cost of goods sold) reported by PepsiCo for 2007, 2006, and 2005? Compute the percentage of cost of sales to net sales in 2007. Comparative Analysis Problem: PepsiCo, Inc. vs. The Coca-Cola Company BYP6-2 PepsiCo ’s financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in Appendix B. Instructions (a) Based on the information contained in these financial statements, compute the following 2007 ratios for each company. (1) Inventory turnover ratio (2) Days in inventory (b) What conclusions concerning the management of the inventory can you draw from these data? Exploring the Web BYP6-3 A company’s annual report usually will identify the inventory method used. Know- ing that, you can analyze the effects of the inventory method on the income statement and bal- ance sheet. Address: , or go to Instructions Answer the following questions based on the current year’s Annual Report on Cisco’s Web site. (a) At Cisco’s fiscal year-end, what was the inventory on the balance sheet? (b) How has this changed from the previous fiscal year-end? (c) How much of the inventory was finished goods? (d) What inventory method does Cisco use? 296 Chapter 6 Inventories Decision Making Across the Organization BYP6-4 On April 10, 2010, fire damaged the office and warehouse of Inwood Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2010: Merchandise Inventory, January 1, 2010, $80,000; Sales (January 1–March 31, 2010), $180,000; Purchases (January 1–March 31, 2010) $94,000. The company’s fiscal year ends on December 31. It uses a periodic inventory system.
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