The reporting treatment for investments in common stock depends on the level of ownership and the ability to influence policies of the investee. The reporting treatment may even change over time as ownership levels or other factors change. When investees are not consolidated, the investments typically are reported in the Investments section of the investor's balance sheet. However, the investor's income from those investments is not always easy to find in the investor's income statement.

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a. Harley-Davidson, Inc., holds an investment in the common stock of Buell Motorcycle Company. How was this investment reported by Harley before 1998? How is the investment reported now? Why did Harley change its method of reporting its investment in Buell Motorcycle?

b. How does Texaco Inc. report its investment in Motiva Enterprises? What type of enterprise is Motiva? Who are the owners of Motiva?

c. Where does Texaco's income from Motiva appear in its income statement, and how is it labeled? Where are Texaco's revenues from transactions with affiliates reported?

d. Prior to 1999, where did Pepsico report its share of the net income or loss of its unconsolidated affiliates over which it exercised significant influence but not control? What rationale might be given for this treatment? How does Pepsico now report this type of income?

e. Does Sears, Roebuck have any investments in companies that it accounts for using the equity method? How many such investments does it have? Where are these investments reported in the balance sheet, and where is the income from these investments reported in the income statement?