Selected accounts from the financial statements for Yemellas Inc. under three different methods of accounting for its

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Selected accounts from the financial statements for Yemellas Inc. under three different methods of accounting for its 40% interest in Wawa Ltd. are presented below. There was no acquisition differential and were no intercompany transactions. 


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Required 


(a) Briefly explain whether it is a coincident or expected that Yemellas’ common shares and retained earnings are the same values under all three alternatives. 


(b) Calculate the return on total shareholders’ equity, current ratio and debt-to-equity ratio for each of the three financial statements. 


(c) Explain which financial statement reports the best ranking for each of the three ratios. 


(d) Calculate the current ratio for Wawa’s separate entity financial statements.

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Modern Advanced Accounting In Canada

ISBN: 9781260881295

10th Edition

Authors: Hilton Murray, Herauf Darrell

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