Refer to the Web sites www.cokecce.com and www.coca-cola.com.

Required
Address the following:
1. How does The Coca-Cola Company account for its investment in Coca-Cola Enterprises, Inc. (CCE)? What are the accounting implications of the method Coca-Cola uses?
2. What criterion does Coca-Cola use to choose the method of accounting for its investment in CCE?
3. Describe the relationship between Coca-Cola and CCE.
4. Calculate the debt-to-equity ratios in the most recent two years for both Coca-Cola and CCE. Does Coca-Cola have the ability to influence CCE’s debt levels?
5. How are Coca-Cola’s financials affected by its relationship with CCE? In general, how would Coca-Cola’s financials change if it consolidated CCE?