Toyota Motor Company has 507 consolidated subsidiaries both inside and outside of Japan. It owns 100% of

Question:

Toyota Motor Company has 507 consolidated subsidiaries both inside and outside of Japan. It owns 100% of many of these companies and percentages ranging from 50% to 99% in the others. Toyota’s 2011 income statement showed the following (in billions of yen):

Income (loss) before income taxes and equity in earnings of affiliated companies … ¥563

Provision for income taxes …………………………………………………………. (313)

Equity in earnings of affiliated companies ……………………………………. 215

Net income ……………………………………………………………………. 465

Less: Net income attributable to the noncontrolling interests ……………….. (57)

Net income attributable to Toyota Motor Corporation ……………………. ¥408

Toyota’s 2011 balance sheet included an amount of ¥588 billion for “Noncontrolling Interest” and ¥1,827 billion in “Affiliated Companies.”

1. What net income would be attributable to stockholders in Toyota have been if Toyota had owned 100% of all its subsidiaries?

2. Suppose Toyota’s average ownership percentage of these consolidated subsidiaries is 90%. What was the total 2011 net income of the subsidiaries?

3. Toyota has 56 affiliated companies with a total net income of ¥642 billion. What was Toyota’s average percentage ownership of these affiliated companies? What is Toyota’s maximum percentage ownership of these companies?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
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