Coke and Pepsi
Pepsi net revenue sales are 39,474. They had a 12. 34% increase (39,474 – 35,137 = 4,337) 4,337/35,137=12. 34% V) Coca-Cola recognizes revenue upon shipment when the title or receipts, based on specific sales terms of the company’s products are transferred to partners, resellers, retailers and other customers. No right of return except for defects related to manufacturing. Customer incentives are deducted.
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Pepsi recognizes revenue upon shipment or delivery to their customers based on written sales terms that do not allow for right of return, however their policy is to replace damaged and out-of-date products from store shelves to ensure that customers receive the product quality and freshness that they expect. Similarly, their policy for warehouse-distributed products is to replace damaged and out-of-date products. Based on their historical experience with this practice, they have reserved for anticipated damaged and out-of-date products. The revenue recognition for each company is very similar as to when title transfers and to what returns are acceptable. Pepsi mentions store shelves for their retailers and how those returns are accepted.