_BJCFA二级强化班财务报表分析演示习题.pdfVIP

READING 21 Intercorporate Investment: QA 1-6 (原书BOOK-2 P55 Question 1-6) The following information relates to Questions 1—6 Cinnamon, Inc. is a diversified manufacturing company headquartered in the United States, and it complies with U.S. CAAP. In 2008, Cinnamon held a 19 percent passive stake in Cambridge Processing that was classified as available-for- sale. During the year, the value of this stake rose by $2 million. In December 2008, Cinnamon announced that it would be increasing its ownership to 50 percent effective 1 January 2009. Peter Lubbock, an analyst following both Cinnamon and Cambridge, is curious how the increased stake will affect Cinnamon’s consolidated financial statements. He asks Cinnamon’s CFO how the company will account for the stake, and is told that the decision has not yet been made. Lubbock decides to use his existing forecasts for both companies’ financial statements to compare various alternative outcomes. Lubbock gathers abbreviated financial statement data for Cinnamon (Exhibit 1) and Cambridge (Exhibit 2) for this purpose. Exhibit 1 Selected Financial Statement Estimates for Cinnamon, Inc. ($ Millions) Year Ending 31 December 2008 2009 Revenue $1,400 $1,575 Operating income 126 142 Net income 62 69 31 December 2008 2009 Total assets 1,170 1,317 Shareholders’ equity