Selected accounts from the financial statements for Yemellas Inc. under three different methods of accounting for its 40% interest in Wawa Ltd. are presented below. There was no acquisition differential and were no intercompany transactions. 

Required 

(a) Briefly explain whether it is a coincident or expected that Yemellas’ common shares and retained earnings are the same values under all three alternatives. 

(b) Calculate the return on total shareholders’ equity, current ratio and debt-to-equity ratio for each of the three financial statements. 

(c) Explain which financial statement reports the best ranking for each of the three ratios. 

(d) Calculate the current ratio for Wawa’s separate entity financial statements.

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Revenues Equity method income Expenses Net income attributed to Yemellas Net income attributed to NCI Current assets Investment in Wawa Other assets Total assets Current liabilities Long-term liabilities Common shares Retained earnings Noncontrolling interest Total liabilities & equity Equity Method $ 1,740 80 1,670 150 320 800 590 1,710 190 850 100 570 0 1,710 Proportionate Consolidation $4,780 4,630 150 896 2,894 3,790 670 2,450 100 570 0 3,790 Full Consolidation $ 9,340 9,070 150 120 1,760 6,350 8,110 1,390 4,850 100 570 1,200 8,110