From the course: Accounting Foundations: Asset Impairment

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Does Coca-Cola have more cash or more fixed assets?

Does Coca-Cola have more cash or more fixed assets?

From the course: Accounting Foundations: Asset Impairment

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Does Coca-Cola have more cash or more fixed assets?

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- As of December 31st, 2018, Coca-Cola's balance sheet reported $11 billion dollars in cash, and $8 billion dollars in property, plant and equipment. - This property, plant, and equipment is composed of things such as machines, buildings, and land. Sometimes we call these assets fixed assets. - Okay, Coca-Cola has a reported amount of $11 billion dollars in cash and $8 billion in fixed assets. Well, here's the simple question, does Coca-Cola have more cash, or more fixed assets? - Well, at first glance, the answer appears obvious, $11 billion dollars is more than $8 billion dollars so Coca-Cola has more cash. - Well, not so fast. There must be more to it than that, otherwise, we wouldn't have asked the question. - Here's the key issue: Do balance sheets report assets at their cost, or at their market value? - And the answer is cost. Almost all assets are reported in the balance sheet at their cost. - Now for some…

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