problem $5-17$

$($O$2\mathrm{.}3\mathrm{.}4$

On fuly $1.$ Year $4.$ Aaron Co$.$ purchased $80\%$ of the voting shares of Bondi Lid. For $$543,840.$ The statement of financial posstion of Bondi on that date follows. The accounts receivable of Bondi were collected in October. Year $4,$ and the invention was completely sold by May Year $5,$ Bondi's fixed assets had a remaining life of $15$ years on July $1.$ Year $4.$ and die bends payable mature on June $30,$ Year $8.$ The bonds were issued on July $1.$ Year $1.$ The stated rate of interest on the bonds is $6\%$ payable semiannualty. The market rate of interest was $8\%$ on July $1.$ Year $4.$ Terts for impairment of goodwill indicaled a loss of $$8\mathrm{.}329$ in Year $ and $$5\mathrm{.}553$ in Year $6.$

BONDI LTD$.$

STATEMENT OF FINANCIAL POSTHON

As at July I. Year $4$

$\backslash$table$[[,$Carning Amount,Fair Value$],[$Plontassets $($net$),$$$540,000,$$$450\mathrm{.}000],[$Inventory$,180\mathrm{.}000,228,000],[$Accounts receivable,$120\mathrm{.}000,144\mathrm{.}004],[$Cash$,96\mathrm{.}000,96\mathrm{.}000],[,$$$936\mathrm{.}000,],[$Ordinary shares,$$120,000,],[$Retained carnings,$508\mathrm{.}800,],[$Bonds payable,$200,000,186,534],[$Current liabilities,$107\mathrm{.}200,107\mathrm{.}200],[,$$$936\mathrm{.}000,]]$

The financial statements for Aaron and Bondi at December $31,$ Year $6,$ are presented below. Aaron has used the equily method to account for its investment in Bondi.

STATEMENTS OF FINANCIAL POSITION

$\backslash$table$[[,$Aaron,Bondi$],[$Plant assets $($net$),$S $720,000,$s $540,000],[$Investment in Bondi,$520,319,],[$Other investments,$250\mathrm{.}666,],[$Inventory$,300,000,276,000],[$Accounts receivable,$180\mathrm{.}000,114,000],[$Cash$,120\mathrm{.}000,84,000],[,$$$2,090,985,$$$1,014,000$