9 I Intercorporate Entities e Interpreting Equity Method Investment Footnotes AT& T reports the following footnote to its 2015 10-K report. X E9-37. Equity Method Investments Investments in partnerships, joint ventures and less than majority-owne subsidiaries in which we have significant influence are accounted for under the equity method following table is a reconciliation of our investments in equity affiliates as presented on our dated balance sheets. The 2015 2014 $ millions 250$3,860 226 Additional investments. 1,232 79 (30) 175 Dividends and distributions received.. .. Sale of Amrica Mvil shares. .. Other adjustments . . . . (148) (3,817) (46) $1,606 250 Undistributed earnings from equity affiliates were $162 and $88 at December 31,2015 and 2014 a. At what amount is the equity investment in affiliates reported on AT&T's balance sheet? b. Did affiliates pay dividends in 2015? How do you know? c. How much income did AT&T report in 2015 relating to this investment in affiliates? d. Interpret the AT&T statement that "undistributed earnings from equity affiliates were $162 and $98 at December 31, 2015 and 2014." e. How does use of the equity method impact AT&T's ROE and its RNOA components (net operating asset turnover and net operating profit margin)? f. AT&T accounts for its investment in affiliates under the equity method Whu? Module 9 I Intercorporate Entitie 939. Constructing the Consolidated Balance Sheet at Acquisition LO Winston Company purchased all of Marcus Company's common stock for $600,000 cash on January 1, at which time the separate balance sheets of the two corporations appeared as follows. Winston Company Marcus Company Consolidating Adjustments Consolidated 2,300,000 700,000 $700,000 $ 900,000 1,400,000 600,000 $160,000 300,000 240,000 $700,000 Retained earnings Total liabilities and equit$2,900,000 During purchase negotiations, Winston determined the appraised value of Marcus's Other Assets was $720,000, and all of its remaining assets and liabilities were appraised at values approximating their book values. The balance of the purchase price was ascribed to goodwill. Prepare the consolidating adjust- ments and the consolidated balance sheet at acquisition