Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Question
Chapter 5, Problem 5.5C
a
To determine
Consolidated Income statement: Immediately after the acquisition, a complete set of consolidated financial statements are prepared for the consolidated entity. In that process, all the revenue and expenses of both the individual companies are combined to create a consolidated income statement to determine consolidated net income, in this process all the intercompany obligations are eliminated.
The reporting of income to non-controlling shareholders’ of consolidated entity in consolidated income statement of 2016.
b
To determine
Consolidated Income statement: Immediately after the acquisition, a complete set of consolidated financial statements are prepared for the consolidated entity. In that process, all the revenue and expenses of both the individual companies are combined to create a consolidated income statement to determine consolidated net income, in this process all the intercompany obligations are eliminated.
The way M company reports its subsidiary non-controlling interest in 2016
c
To determine
Consolidated Income statement: Immediately after the acquisition, a complete set of consolidated financial statements are prepared for the consolidated entity. In that process, all the revenue and expenses of both the individual companies are combined to create a consolidated income statement to determine consolidated net income, in this process all the intercompany obligations are eliminated.
The level of ownership M has in several special purpose affiliates, and determine the treatment of this affiliates in consolidation.
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Note
Valuation.
The Hastings Company is a multinational manufacturer of electrical equipment and components. Selected financial information is as follows:
Consolidated Statements of Income
For Period Ended (In millions)
Net sales
Operating income
Interest expense
Other income (expense), net
Noncontrolling interests
Earnings before income taxes
(Benefit) provision for income taxes
Earnings from continuing operations
Discontinued operations (net of tax)
Net earnings
Abbreviated Consolidated
(in millions)
2020
2019
$12,586.60 $12,476.88
680.16 1416.22
2018
$10,164.70
1403.61
(331.89) (238.55)
46.54
(253.00)
(6.80)
4.03
(20.10) (51.09) (37.83)
400.26 1079.78 1131.26
399.23
(3.77) 369.72
404.03
710.06
732.03
0.00
160.16
36.40
$404.03
$870.22
$768.43
2020
$910.00
$3,770.91
Balance Sheet
2020
2019
$14,382.81 $14,368.38
Total assets
Long-term debt
Shareholders' equity
Total liabilities and stockholders' equity $14,382.81 $14,368.38
Note 8-Long-Term Debt and Credit Facilities
2019
(in millions)…
Compute Measures for DuPont Disaggregation Analysis
Use the information below for 2018 for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).
($ millions)
2017
Sales
Net income, consolidated
Net income attributable to 3M shareholders
Assets
Total equity
Equity attributable to 3M shareholders
a. Compute return on equity (ROE).
Round answer to two decimal places (ex: 0.12345 = 12.35%)
54.6
* %
b. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage.
• Round profit margin to two decimal places (ex: 0.12345= 12.35%)
• Round asset turnover and financial leverage to three decimal places.
Profit margin 16.33
Asset turnover 0.88
2018
$32,765
5,363
5,349
36,500 $37,987
9,848 11,622
9,796 11,563
* %
Financial leverage 3.73
c. Compute ROA
Round answer to two decimal places (ex: 0.12345= 12.35%)
14.36
* %
x
Compute Measures for DuPont Disaggregation Analysis
Use the information below for 2018 for 3M Company to answer the requirements
($ millions)
Sales
Net income, consolidated
Net income attributable to 3M shareholders
Pretax interest expense
Assets
Total equity
Equity attributable to 3M shareholders
a. Compute return on equity (ROE) from the perspective of a 3M shareholder.
Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE.
Denominator
Numerator
Net income attributable to 3M shareholders ◆ Average total equity
$
5349 $
$
$
b. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage. (Perform these computations from a consolidated perspective).
Profit Margin (PM)
Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to…
Chapter 5 Solutions
Advanced Financial Accounting
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
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