neil1234

These would be my adjustments:

-Remove income from affiliate and add the proportionate revenues and expenses to income statement.
-Remove investment in affiliate and add the proportionate percentage of the associate's assets and liabilities.

According to the Stalla guide, assets would increase when going from equity method to proportionate consolidation. Revenues would also increase. Using the example that they provided, asset turnover AND the financial leverage ratio would increase.

I'd like the question code so I can look it over before I send them an e-mail regarding this question.

NO EXCUSES