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Hi, Sir from PYQ Q4 ii)
Guidance co had purchased 25% interest in associate for cash, investment had cost $15m and made profit of $32m, and acounted for the purchase of associate correctly.
Ans: no need to adjust for the original $15m investment in associate because one asset is merely replaced by another but the total assets remain the same.
My question is which asset being used to replace the investment of $15m?
Thank you
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