Hello, please help with the Problem below. Advanced accounting for Intercorporate Investments. CH 1, p.36, problem 36. Thank you 36.

36. Interpreting equity method footnote

In its March 31, 2017, SEC Form 20-F (i.e., the annual report for non-United-States companies listed

on United States stock exchanges), Toyota Motor Corporation reports a 2,845,422 million balance related to its equity method investments in affiliated companies. According to the report, [a]s of March 31, 2017, Toyota operated through 597 consolidated subsidiaries (including variable interest entities) and 200 affiliated companies, of which 54 companies were accounted for through the equity method.

Excerpts from its footnote relating to these equity-method investments follow:

Investments in and transactions with affiliated companies

Summarized financial information for affiliated companies accounted for by the equity method is

shown below:

Yen in millions March 31,

2016 2017

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,299,674 11,795,296

Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,961,889 11,003,432

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,261,563 22,798,728

Current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,414,894 7,419,176

Long-term liabilities and noncontrolling interests . . . . . . . . . . . . . . . . 5,509,745 5,423,938

Affiliated companies accounted for by the equity method

shareholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,336,924 9,955,614

Total liabilities and shareholders equity . . . . . . . . . . . . . . . . . . . . . 22,261,563 22,798,728

Toyotas share of affiliated companies accounted for by the

equity method shareholders equity . . . . . . . . . . . . . . . . . . . . . . . 2,631,389 2,845,422

Number of affiliated companies accounted for by the equity

method at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 54

Yen in millions For the years ended March 31,

2015 2016 2017

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,163,457 31,037,029 30,309,263

Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,614,946 3,852,889 3,644,267

Net income attributable to affiliated companies

accounted for by the equity method . . . . . . . . . . . . 966,133 957,742 1,099,080

Equity in earnings of affiliated companies attributable

to Toyota Motor Corporation . . . . . . . . . . . . . . . . . . 308,545 329,099 362,060

Account balances and transactions with affiliated companies are presented below:

Yen in millions March 31, 2016 2017

Trade accounts and notes receivable, and other receivables . . . . . . 256,700 289,406

Accounts payable and other payables . . . . . . . . . . . . . . . . . . . . . . . . 676,415 691,173

Yen in millions For the years ended March 31, 2015 2016 2017

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,785,238 1,804,493 1,914,318

Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,065,613 4,359,854 5,357,682

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2015, 2016 and 2017 were 174,485 million, 186,212 million, and 180,326 million, respectively.

Toyota does not have any significantly related party transactions other than transactions with affiliated

companies in the ordinary course of business.

a. Based on Toyotas March 31, 2017 balance sheet information, what is the average percentage

ownership Toyota has in its unconsolidated equity method affiliates?

b. Based on Toyotas income statement information for the year ended March 31, 2017, what is the

average percentage ownership Toyota has in its unconsolidated equity method affiliates?

c. Why do the percentages you calculated in requirements a and b differ?

d. Based on the activity information provided, reconcile Toyotas March 31, 2017 Equity investment

balance to the March 31, 2016 Equity investment balance. Do the amounts reconcile? If not, what

can cause the amounts to not reconcile