ADVANCED ACCOUNTING
ADVANCED ACCOUNTING
3rd Edition
ISBN: 9781618531902
Author: Halsey & Hopkins
Publisher: Cambridge Business Publishers
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Chapter 6, Problem 19Q
To determine

Mention the consolidation adjustments that parent is required to make in preparing their

consolidated financial statements for the purchase of subsidiary bonds in the year of

purchase and also state in the years following their purchase assuming that the subsidiary

company acquires from an unaffiliated third party bonds that were issued by the parent

company.

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Sequoia Resorts pays $780,000 plus $17,500 in closing costs to buy out a competitor. The real estate consists of land appraised at $95,000, a building appraised at $342,000, and recreational equipment appraised at $398,000. Compute the cost that should be allocated to the building.
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Cozy Retreats currently sells 420 Standard hot tubs, 580 Luxury hot tubs, and 190 Premium model hot tubs each year. The firm is considering adding a Comfort model hot tub and expects that, if it does, it can sell 340 of them. However, if the new hot tub is added, standard sales are expected to decline to 290 units while Luxury sales are expected to decline to 310. The sales of the Premium model will not be affected. Standard hot tubs sell for an average of $8,900 each. Luxury hot tubs are priced at $14,500 and the Premium model sells for $22,000 each. The new Comfort model will sell for $12,300. What is the value of erosion?
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