Up Company owns 60 % of SideCo , and Down Company owns the other 40 % of SideCo . Up Company and Down Company are competitors in the same market . Which one of the following sets reflects the most likely level of influence each company has over SideCo ?
Question 11
On July 1 , 2005 , Casa Development Co . purchased a tract of land for $ 1,200,000 . Casa incurred additional costs of $ 300,000 during the remainder of 2005 in preparing the land for sale . The tract was subdivided into residential lots as follows : Using the relative sales value method , what amount of costs should be allocated to the Class A lots ?
Question 12
On January 2 of the current year , Cruises , Inc . borrowed $ 3 million at a rate of 10 % for three years and began construction of a cruise ship . The note states that annual payments of principal and interest in the amount of $ 1.3 million are due every December 31 . Cruises used all proceeds as a down payment for construction of a new cruise ship that is to be delivered two years after the start of construction . What should Cruise report as interest expense related to the note in its income statement for the second year ?
Question 13
Puff Co . acquired 40 % of Straw , Inc .' s voting common stock on January 2 , 2005 , for $ 400,000 . The carrying amount of Straw ' s net assets at the purchase date totaled $ 900,000 . Fair