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Show the 1998 financial statement effects of reporting Coca-Cola Enterprises using the equity method for The Coca-Cola Company. How much control does The Coca- Cola Company have over Coca-Cola Enterprises? Is the equity method the most appropriate method for recording this investment?

2 A Business Analysis Valuation (1).pdt - Adobe Acrobat Reader DC File Edit View Sign Window Help Home Tools Business Analysis Business Analysis.... x Ch11 TB] Mergers ... . Sign In 295 / 957 11896 Search 'Measure Export PDF Edit PDF Do Create PDF = Comment Combine Files DISCUSSION QUESTIONS 1. The Coca-Cola Company owns 42 percent of Coca-Cola Enterprises, the largest soft- drink bottler in the world. On December 31, 1998, The Coca-Cola Company reported the following information in its financial statement footnotes: "The excess of our equity in the underlying net assets of Coca-Cola Enterprises over our investment is primarily amortized on a straight-line basis over 10 years. The bal- ance of this excess, net of amortization, was approximately $442 million at Decem- ber 31, 1998. A summary of financial information for Coca-Cola Enterprises is as follows (in millions): December 31, 1998 1997 Current assets $ 2.285 S 1.813 Noncurrent assets 18.817 15,674 Total assets $21.132 $17.487 Current liabilities $3.397 $ $3,032 Noncurrent liabilities 15.297 12.673 Total liabilities S18,694 $15.705 Share-owners' equity $2.438 $1,782 Company equity investment $584 $184 Operating revenues $13.414 $11.278 Cost of goods sold 8,391 7,096 (continued) El Organize Pages De Compress PDF Redact 0 Protect Fill & Sign Send for Comments More Tools Create, edit and sign PDF coms & grenents Start Free Trial Type here to search W ING 19-25 16/11/2020 2 A Business Analysis Valuation (1).pdt - Adobe Acrobat Reader DC File Edit View Sign Window Help Home Tools Business Analysis Business Analysis.... Ch11 [TB] Mergers ... . Sign In 296 / 957 + 118% - Search 'Measure Export PDF Edit PDF Do Create PDF Entity Accounting Analysis 291 = Comment Combine Files Organize Pages De Compress PDF Redact 1998 1997 0 Protect $5.023 S869 $4,182 S720 Fill & Sign December 31, Gross profit Operating income Net income Net income available to common share owners Company equily income 142 S171 Send for Comments S141 $51 $169 $59 More Tools Create, edit and sign PDF coms & grenents "Our net concentrate syrup sales to Coca-Cola Enterprises were $3.1 billion in 1998. Coca-Cola Enterprises purchases sweeteners through our Company. ... These trans- actions amounted to $252 million in 1998." Show the 1998 financial statement effects of reporting Coca-Cola Enterprises using the equity method for The Coca-Cola Company. How much control does The Coca- Cola Company have over Coca-Cola Enterprises? Is the equity method the most ap- propriate method for recording this investinent? LA LA LA 9 P PS Start Free Trial Type here to search ING 1926 16/11/2020

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