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Transaction Analysis for The Coca-Cola Company

Are you a Coca-Cola fan? Here are some trivial facts (https://www.eatthis.com/coca-cola-facts/).
:: John Stith Pemberton, who created Coke in 1886, had originally billed the soda as a
"temperance" drink, or an alternative to alcohol.
:: Coca-Cola invented the six-pack! The term "six-pack" conjures images of beer these days, but it
was originally a way to buy and carry multiple bottles of Coke, with the six-pack invented in 1923.
:: The Coca-Cola recipe is kept in a secure vault. It is kept in The Vaulf of the Secret Formula
exhibit at the World of Coca-Cola museum in Atlanta.
Alrighty enough of that.
Please refer to the 2021, 10-k for The Coca-Cola Company. Please open the 10-k and refer
to the financial statements: the income statement (referred to by Coca-Cola as
the Statements of Income) page 60; the Balance Sheet (page 62), and the statement of
stockholders' equity (referred to by Coca-Cola as the Statements of Shareowners' Equity) page 64.
Please note that Coca-Cola calls retained earnings "Reinvested Earnings."
In this transaction analysis, record the transactions and
adjustments described below directly into the financial statements. Start with the three financial
statements, entering the 2021 numbers for those financials. Then record the transactions and
adjustments, using a column to record each, to the right of the 2021 numbers.
As transactions are recorded, be sure the financial statements are updated accordingly, as shown
in the online talks, arriving at final balances after all transactions have been recorded.
Be sure items are formatted properly, including cell borders, number format, and be sure
the financial statement worksheets are landscaped and fitted to one page. All financial
statement totals and subtotals must be formulas. Be sure that "Net Income Attributable to
Shareowners of The Coca-Cola Company" on the Statement of Reinvested Earnings, in the
transaction columns, consists of a formula that captures all of the revenue and expenses
on the statement of income, as shown in the online talks. Also be sure that Reinvested Earnings
on the balance sheet, in the transaction columns, is linked to all items between the beginning
and ending balances on the Statement of Reinvested Earnings, such that any change in
the Statement of Reinvested Earnings is automatically captured as a change to Reinvested
Earnings on the Balance Sheet. Please do this as is shown in the online talks. Transactions
are on the next page, amounts are in $millions.
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Transaction Analysis for The Coca-Cola Company

1 Let's get accounts receivable and bad debts taken care of first. If you look at the balance
sheet you will see that Trade accounts receivable, net of allowances of $516, is $3,512.
This means that total receivables are $3,512 + $516 = $4,028. In other words,
Accounts receivable is $4,028, Allowance for doubtful accounts is $516, and
net realizable value is $3,512. This is commonly how receivables are presented on
a balance sheet. Assume Coca-Cola performs an aging of accounts receivable to determine
estimated bad debts, and the aging schedule is below. Given the information
in the schedule below, please adjust accounts receivable to its correct net realizable
value. Please be sure to show your computations. Please note that because the
allowance account is not shown on the balance sheet, reduce Accounts receivable
for the amount you arrive at for the adjustment.

Total Not Yet Number of Days Past Due

A.R. Past Due 1 - 30 31 - 60 61 - 90 Over 90
$4,028 $2,800 $600 $350 $170 $108
Percentage estimated
7% 15% 40% 50% 70%
uncollectible

2 An officer of the Coca-Cola borrowed $80 and signed a 120-day, 12% note. Please record
this, and use "Prepaid expenses and other current assets" as the account for the note receivable,
in other words assume Notes receivable is among the collection of items in that line item.
3 One hundred twenty days later, the officer repays Coca-Cola the amount borrowed, plus
interest, in #2 above. Please use 365 days as the denominator in your computation of interest.
4 Coca-Cola declared and paid an additional $1,100 cash dividend.
5 Sales of beverages, on account, terms 4/15, n/45, for cash, $3,800. Cost of the beverages sold
was $900.
6 Purchased inventories, on account, $1,200, terms 3/15, n/45.
7 Paid for the inventory purchased in #6, 10 days after the purchase. Please remember to
reduce Inventory for the discount.
8 Customers paid for the amount sold in #5, 11 days after the sale. Remember to reduce Net
operatng revenues for the discount.
9 Please refer to the Statement of Reinvested Earnings, specifically the "Adoption of accounting
standards" line item. This item captures the change made to financial statements when a
new accounting standard is issued which changes how a company accounts for something.
Let's pretend a new accounting standard was issued which changed how the company
accounts for Marketable securities (balance sheet current asset). Assume that adjusting
for this change resulted in increasing Marketable securities $12 and increasing "Adoption of
accounting standards" $12. Please record this.
10 Coca-Cola incurred additional income taxes, $760. On the statement of income this is
recorded in Income taxes. They will pay these taxes in a month, so record this as a liability,
in Accrued income taxes.
 THE COCA-COLA COMPANY
STATEMENT OF INCOME
Year Ended December 31, 2021
1 2 3 4 5 6 7 8 9 10 Updated
Net Operating Revenues $ 38,655 3,800 (152) $ 42,303
Cost of goods sold 15,357 900 16,257
Gross Profit 23,298 26,046
Selling, general and administrative expenses 12,144 71 12,215
Other operating charges 846 846
Operating Income 10,308 12,985
Interest income 276 3 279
Interest expense 1,597 1,597
Equity income (loss) - net 1,438 1,438
Other income (loss) - net 2,000 2,000
Income Before Income Taxes 12,425 15,105
Income taxes 2,621 760 3,381
Consolidated Net Income 9,804 11,724
Less: Net income attributable to noncontrolling interests 33 33
Net Income Attributable to Shareowners of The Coca-Cola Company $ 9,771 $ 11,691

THE COCA-COLA COMPANY

STATEMENT OF REINVESTED EARNINGS
Year Ended December 31, 2021
Balance, January 1, 2021 $ 66,555 $ 66,555
Adoption of accounting standards 19 12 31
Net income attributable to shareowners of The Coca-Cola Company 9,771 (71) 0 3 0 2,900 0 0 (152) 0 (760) 11,691
Dividends (7,251) (1,100) (8,351)
Balance, December 31, 2021 $ 69,094 $ 69,926
 THE COCA-COLA COMPANY
BALANCE SHEET
DECEMBER 31, 2021

ASSETS 1 2 3 4 5 6 7 8 9 10 Updated
Current Assets
Cash and cash equivalents $ 9,684 (80) 83 (1,100) (1,164) 3,648 $ 11,071
Short-term investments 1,242 1,242
Total Cash, Cash Equivalents and Short-Term Investments 10,926 12,313
Marketable securities 1,699 12 1,711
Trade accounts receivable, less allowance of $516 3,512 (71) 3,800 (3,800) 3,441
Inventories 3,414 (900) 1,200 (36) 3,678
Prepaid expenses and other current assets 2,994 80 (80) 2,994
Total Current Assets 22,545 24,137
Equity method investments 17,598 17,598
Other investments 818 818
Other noncurrent assets 6,731 6,731
Deferred income tax assets 2,129 2,129
Property, plant and equipment - net 9,920 9,920
Trademarks with indefinite lives 14,465 14,465
Goodwill 19,363 19,363
Other intangible assets 785 785
Total Assets $ 94,354 $ 95,946
LIABILITIES AND EQUITY
Accounts payable and accrued expenses $ 14,619 1,200 (1,200) $ 14,619
Loans and notes payable 3,307 3,307
Current maturities of long-term debt 1,338 1,338
Accrued income taxes 686 760 1,446
Total Current Liabilities 19,950 20,710
Long-term debt 38,116 38,116
Other noncurrent liabilities 8,607 8,607
Deferred income tax liabilities 2,821 2,821
The Coca-Cola Company Shareowners' Equity -
Common stock 1,760 1,760
Capital surplus 18,116 18,116
Reinvested earnings 69,094 (71) 0 3 (1,100) 2,900 0 0 (152) 12 (760) 69,926
Accumulated other comprehensive (loss) (14,330) (14,330)
Treasury stock (51,641) (51,641)
Equity Attributable to Shareowners of The Coca-Cola Company 22,999 23,831
Equity attributable to noncontrolling interests 1,861 1,861
Total Equity 24,860 25,692
Total Liabilities and Equity $ 94,354 $ 95,946
Transaction #1
Total Not Yet Number of Days Past Due
A.R. Past Due 1 - 30 31 - 60 61 - 90 Over 90
$4,028 $2,800 $600 $350 $170 $108
Percentage estimated
7% 15% 40% 50% 70%
uncollectible

Bad debts $196 $90 $140 $85 $76 = $587

Balance in Allowance for bad debts $516

Bad debts based on above estimate $587
Increase in Allowance for bad debts $71

Transaction #3
Note receivable 80
X Annual interest 12%
X Time 120/365
Interest revenue $3