PepsiCo, Inc. reported "bottling equity income" of $374, $560, and $553 on its income statements for 2008, 2007, and 2006, respectively (dollars in millions). The computation of net cash from operating activities on the company's statement of cash flows includes "bottling equity income, net of dividends" of ($202), ($441), and ($442) for the same three years.
REQUIRED:
a. Provide the entry made by PepsiCo to record affiliate net income in 2008.
b. Why is there a reference to bottling equity income on the statement of cash flows?
c. How many cash dividends did PepsiCo receive from its bottling affiliates during 2008, 2007, and 2006?
d. Discuss how PepsiCo management might evaluate the performance of these affiliates.