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 $734 million, and provides the following financial information of its investee companies in a footnote to its 10-K report: As of and for the years ended December 31, (in millions) 2010 2009 2008 Net sales Gross margin $ 7,107 $5,554 $6,610 1,651 1,365 1,509 Net income 668 427 498 Cummins share of net income Royalty and interest income Total equity, royalty and interest income from investees $321 $ 196 $231 30 18 22 $ 351 $214 $253 Current assets $ 2,741 $ 2,005 Noncurrent assets 1,253 1,123 Current liabilities (1,837) (1,406) Noncurrent liabilities Net assets (499) $1,658 (390) $1,332 Cummins share of net assets $ 734 $ 587

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 $734 million, and provides the following financial information of its investee companies in a footnote to its 10-K report: As of and for the years ended December 31, (in millions) 2010 2009 2008 Net sales Gross margin $ 7,107 $5,554 $6,610 1,651 1,365 1,509 Net income 668 427 498 Cummins share of net income Royalty and interest income Total equity, royalty and interest income from investees $321 $ 196 $231 30 18 22 $ 351 $214 $253 Current assets $ 2,741 $ 2,005 Noncurrent assets 1,253 1,123 Current liabilities (1,837) (1,406) Noncurrent liabilities Net assets (499) $1,658 (390) $1,332 Cummins share of net assets $ 734 $ 587

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 27P

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