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
net assets that are included which means , $3997 - $958 = $ 3039
millions of assets are excluded. Is this correct or is the question
asking for the total amount of assets which is missing from the
balance sheet?
Assets = (Current assets $2,458 million + Noncurrent assets $1539
million) = $3,997 million
Liabilities = (Current liabilities $1,796 million + Noncurrent
liabilities $284 million) = $2,080 million
Assets = $958million
Liabilities = $284million
a)What assets and liabilities of unconsolidated affiliates are omitted from Cummins’ balance sheet as a result...
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...
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...
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)
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...
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...
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...
Balance Sheet Assets Liabilities Current Assets Current Liabilities Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Accounts payable . . . . . . . . . . . . . . . . . . . . . 36 Accounts receivable . . . . . . . . . . . . . . ....
6. Balance Sheet Assets Liabilities Current Assets Current Liabilities Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Accounts payable . . . . . . . . . . . . . . . . . . . . . 41 Accounts receivable . . . . . . . . . . . . . ....
Balance Sheet Assets Liabilities Current Liabilities Current Assets 49 36 20 Accounts payable Notes payable/short term debt Total current liabilities ====== Cash Accounts receivable Inventories Total current assets 5 15 41 84 Long-Term Assets Long-Term Liabilities O A. - $1 million OB. $6 million OC. $43 million OD. - $6 million Long-Term Assets Long-Term Liabilities Net property, plant, and equipment Total long-term assets 126 126 Long-term debt Total long term abilities 135 135 Total liabilities Stockholders' Equity Total liabilities and...
Cullumber Corporation Balance Sheet as of December 31, 2017 Liabilities and Equity: Assets: Cash and marketable securities Accounts payable and accruals Accounts receivable Notes payable 300,000 Inventory Total current assets Total current liabilities Long-term debt $2,000,000 Net plant and equipment Common stock Retained earnings $1,250,000 Total assets Total liabilities and equity $8,000,000 You have the following information: Debt ratio 35 % 40 days DSO Current ratio 2.17 Inventory turnover ratio 4.000 Net sales $2.43 million Cost of goods sold =...