What does Coca-Cola’s Form 10-k communicate about its accounts receivable?

The Coca-Cola Company (KO), like other U.S. publicly-held companies, files its financial statements in an annual filing called a Form 10-K with the Securities & Exchange Commission (SEC).

Coca-Cola has several assets that are listed on its balance sheet.  Let’s look at what is reported on Coca-Cola’s Form 10-K regarding its accounts receivable.

See the following excerpts from Coca-Cola’s 2013 Form 10-K:

1. Partial Consolidated Balance Sheets containing current assets (page 76);
2. Trade Accounts Receivable note (page 89); and
3. Partial Statements of Income (page 74).

Questions

1. What is the total (gross) value of Coca-Cola’s accounts receivable (before deduction for its allowance for doubtful accounts) as of December 31, 2013? As of December 31, 2012?
2. What is “net realizable value”?
3. What factors does Coca-Cola use to determine the amount of its allowance for doubtful accounts?
4. In what line item on the income statement would bad debt expense be included?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

• Student handout (pdf) (word) (contains entire blog posting + discussion questions)
• PowerPoint file (brief article overview + discussion questions)

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