Note: I have got different answers for this so I am very confused. Request you to kindly let me know what is correct and please provide an explanation for part (a)
Note: I have got different answers for this so I am very confused. Request you to...
Note: I have got different answers for this so I am very confused. Request you to kindly let me know what is correct and please provide an explanation for part (a) and let me know if I can reach out for some clarifications . Request you to kindly keep me posted E9-36. Analyzing and Interpreting Disclosures on Equity Method Investments Cummins Inc. reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins reports those investments...
Please help to identify the correct answer because I have got different answers for this question so I am very confused. For part a) people have mentioned the omitted assets as $ 958 and then some have mentioned as 2458 + 1539 =3997 and some have mentioned as 3997 - 958 = 3039 as the omitted assets. Please clarify and give proper explanation E9-36. Analyzing and Interpreting Disclosures on Equity Method Investments Cummins Inc. reports investments in affiliated companies, consisting...
E9-36. Analyzing and Interpreting Disclosures on Equity Method Investments Cummins Inc. reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins reports those investments on its balance sheet at $958 million and provides the following financial information on its investee companies in a footnote to its 10-K report. As of and for the years ended December 31 Equity Investee Financial Summary $ millions 2015 2014 2013 Net sales... Gross margin Net income.. $5,946 1,265 $7,426...
a)What assets and liabilities of unconsolidated affiliates are omitted from Cummins’ balance sheet as a result of the equity method of accounting for those investments? b. Do the liabilities of the unconsolidated affiliates affect Cummins directly? Explain. For part a) I have solved it but I am a little confused. Please clarify . Assets = Current Assets + Non - Current Assets = 2458 + 1539 = 3997. Out of this, 958 million $ of assets are Cummin's share of...
Analyzing and Interpreting Disclosures on Equity Method Investments Cummins Inc. (CMI) reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins reports those investments on its balance sheet at $958 million, and provides the following financial information of its investee companies in a footnote to its 10-K report: Equity Investee Financial Summary As of and for the years ended December 31 $ millions 2015 2014 2013 Net sales $5,946 $7,426 $7,799 Gross margin 1,265 1,539...
a. What assets and liabilities of unconsolidated affiliates are omitted from Cummins’ balance sheet as a result of the equity method of accounting for those investments? b. Do the liabilities of the unconsolidated affiliates affect Cummins directly? Explain c. How does the equity method impact a company's ’ ROE and its RNOA components (net operating asset turnover and net operating profit margin)? for part c--> Note: My opinion is : I guess the ROE is unaffected and for the RNOA...