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