The notes that accompany a company’s financial statements provide informative details that would clutter the amounts and descriptions presented in the statements. Refer to the financial statements of PepsiCo, Inc. and the Notes to Consolidated Financial Statements in Appendix A.
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 27, 2008? At December 29, 2007?
(b) Compute the dollar amount of change and the percentage change in inventories between 2007 and 2008. Compute inventory as a percentage of current assets at December 27, 2008.
(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 2008, 2007, and 2006? Compute the percentage of cost of sales to net sales in 2008.