Effect of intercorporate investment policies on financial statements. The Coca-Cola Company (Coke) follows a policy of holding less than a 50% ownership interest in the corporations that bottle its beverages Exhibit 13.18 presents selected balance sheet data for Coke and for its bottling affiliates on December 31. 2007. The first column shows amounts for Coke as reported, with Coke using the equity method to account for investments in its bottlers. The second column shows amounts for Coke's bottlers as reflected in a note to Coke's financial statements Coke's investment in its bottlers exceeds its share of the carrying value of its share of the net assets of these bottlers by $785 million on December 31, 2007.

a. Suggest reasons why the amount for other noncurrent assets in the consolidated column exceeds the sum of the amounts fur noncurrent assets on the accounting records of Coke and of its bottling affiliates.
b. Compute the liabilities-to-assets ratio and the debt-equity ratio for Coke assuming Coke (1) accounts for its investments using the equity method, and (2) consolidates its bottlers
c. Suggest reasons why Coke might choose to own less than 50% of itsbottlers.

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The Coca-Cola Company Condensed Balance Sheet Data (amounts in millions) (Problem 32) EXHIBIT 13.18 Coke as Bottling Reported Affiliates Consolidated ASSETS Current Assets ... $26,356 $12,105 $14,251 Investments in Bottling Affiliates 7,289 Other Noncurrent Assets 23,875 44,636 71,116 Total Assets . $43,269 S58,887 $97,472 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities .. $13,225 $13,930 $27,155 Noncurrent Liabilities 8,300 $21,525 23,374 31,674 Total Liabilities $37,304 $58,829 Shareholders' Equity $21,744 $21,583 $21,744 Noncontrolling Interest in Bottling Affiliates 16,899 Total Shareholders Equity Total Liabilities and Shareholders Equity $21,744 $21,583 38,643 $43,269 $97,472 $58,887 .....