Question
On December 31, 2017, PanTech Company invests $30,000 in SoftPlus, a variable interest entity. In contractual...
On December 31, 2017, PanTech Company invests $30,000 in SoftPlus, a variable interest entity. In contractual agreements completed on that date, PanTech established itself as the primary beneficiary of SoftPlus. Previously, PanTech had no equity interest in SoftPlus. Immediately after PanTech’s investment, SoftPlus presents the following balance sheet:
| Cash | $ | 30,000 | Long-term debt | $ | 180,000 | |||
| Marketing software | 210,000 | Noncontrolling interest | 90,000 | |||||
| Computer equipment | 60,000 | PanTech equity interest | 30,000 | |||||
| Total assets | $ | 300,000 | Total liabilities and equity | $ | 300,000 | |||
Each of the above amounts represents an assessed fair value on December 31, 2017, except for the marketing software. Accordingly, the December 31 fair value of SoftPlus is assessed at $120,000
-
If the marketing software was undervalued by $30,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements?
-
If the marketing software was overvalued by $30,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements?
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
On December 31, 2017, PanTech Company invests $22,000 in SoftPlus, a variable interest entity. In contractual...
On December 31, 2017, PanTech Company invests $22,000 in
SoftPlus, a variable interest entity. In contractual agreements
completed on that date, PanTech established itself as the primary
beneficiary of SoftPlus. Previously, PanTech had no equity interest
in SoftPlus. Immediately after PanTech’s investment, SoftPlus
presents the following balance sheet:
Cash
$
22,000
Long-term debt
$
132,000
Marketing software
154,000
Noncontrolling interest
66,000
Computer equipment
44,000
PanTech equity interest
22,000
Total assets
$
220,000
Total liabilities and
equity
$
220,000
Each of...
On December 31, 2020, Petra Company invests $41,000 in Valery, a variable interest entity. In contractual...
On December 31, 2020, Petra Company invests $41,000 in Valery, a
variable interest entity. In contractual agreements completed on
that date, Petra established itself as the primary beneficiary of
Valery. Previously, Petra had no equity interest in Valery.
Immediately after Petra’s investment, Valery presents the following
balance sheet:
Cash
$
41,000
Long-term
debt
$
99,000
Marketing
software
161,000
Noncontrolling
interest
123,000
Computer
equipment
61,000
Petra equity
interest
41,000
Total
assets
$
263,000
Total
liabilities and equity
$
263,000
Each of...
34) On January 1, 2017, Prince Company purchased an 80% interest in the common stock of...
34) On January 1, 2017, Prince Company purchased an 80%
interest in the common stock of Sivet Company for $1,040,000, which
was $60,000 greater than the book value of equity acquired. The
difference between implied and book value relates to the
subsidiary’s land.
The following information is from the consolidated retained
earnings section of the consolidated statements workpaper for the
year ended December 31, 2017:
SIVET CONSOLIDATED
COMPANY BALANCES
1/01/17 retained earnings $300,000 $1,400,000
Net income 220,000 680,000
Dividends declared...
Montgomery Company purchases 85% of Better Gravy Boat Corporation on December 31, 20X6, for $10 million...
Montgomery Company purchases 85% of Better Gravy Boat
Corporation on December 31, 20X6, for $10 million and is preparing
consolidated financial statements as of that date. Under the
acquisition method of accounting, which of the following statements
is correct with respect to Montgomery's consolidated financial
statements? A. The noncontrolling interest in Better Gravy Boat's
net assets is normally presented between the liabilities section
and stockholders' equity section of Montgomery's balance sheet
under all circumstances. B. The noncontrolling interest in Better...
Montgomery Company purchases 85% of Better Gravy Boat Corporation on December 31, 20X6, for $10 million...
Montgomery Company purchases 85% of Better Gravy Boat
Corporation on December 31, 20X6, for $10 million and is preparing
consolidated financial statements as of that date. Under the
acquisition method of accounting, which of the following statements
is correct with respect to Montgomery's consolidated financial
statements? A. The noncontrolling interest in Better Gravy Boat's
net assets is normally presented between the liabilities section
and stockholders' equity section of Montgomery's balance sheet
under all circumstances. B. The noncontrolling interest in Better...
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also...
Following are preacquisition financial balances for Padre
Company and Sol Company as of December 31. Also included are fair
values for Sol Company accounts.
Padre
Company
Sol Company
Book Values
Book Values
Fair Values
12/31
12/31
12/31
Cash
$
400,000
$
120,000
$
120,000
Receivables
220,000
300,000
300,000
Inventory
410,000
210,000
260,000
Land
600,000
130,000
110,000
Building and equipment (net)
600,000
270,000
330,000
Franchise agreements
220,000
190,000
220,000
Accounts payable
(300,000)
(120,000)
(120,000)
Accrued expenses
(90,000)
(30,000)
(30,000)
Longterm liabilities...
On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s...
On January 1, 2020, French Company acquired 60 percent of K-Tech
Company for $300,000 when K-Tech’s book value was $400,000. The
fair value of the newly comprised 40 percent noncontrolling
interest was assessed at $200,000. At the acquisition date,
K-Tech's trademark (10-year remaining life) was undervalued in its
financial records by $60,000. Also, patented technology (5-year
remaining life) was undervalued by $40,000.
In 2020, K-Tech reports $30,000 net income and declares no
dividends. At the end of 2021, the two...
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several...
Following are selected accounts for Green Corporation and Vega
Company as of December 31, 2023. Several of Green's accounts have
been omitted.
Green
Vega
Revenues
$ 900,000 $ 500,000
Cost of goods sold
360,000
200,000
Depreciation expense
140,000
40,000
Other expenses
100,000
60,000
Equity in Vega’s income
?
Retained earnings, 1/1/2023 1,350,000 1,200,000
Dividends
195,000 80,000
Current assets
300,000
1,380,000
Land
450,000
180,000
Building (net)
750,000
280,000
Equipment (net)...
1)Presents Inc. acquired all of the outstanding common stock of Santa Co. on January 1, 2017,...
1)Presents Inc. acquired all of the outstanding common stock of
Santa Co. on January 1, 2017, for $257,000. Annual amortization of
$19,000 resulted from this acquisition. Presents reported net
income of $70,000 in 2017 and $50,000 in 2018 and paid $22,000 in
dividends each year.
Santa reported net income of $40,000 in 2017 and $47,000 in 2018
and paid $10,000 in dividends each year. On the consolidated
financial statements for 2017,
a)what amount should have been shown for Equity in...
On 31 December 20x8, M Ltd paid $300,000 to acquire 80% interest of N Ltd when...
On 31 December 20x8, M Ltd paid $300,000 to acquire 80% interest
of N Ltd when the fair value of N Ltd’s net assets was represented
by share capital of $100,000 and retained profit of $100,000,
except for N Ltd’s freehold land which was carried at $100,000 but
deemed to have a fair value of $150,000. On this date, N Ltd’s
share capital comprised 100,000 ordinary shares with a fair value
of $2.60 per share.
Assuming the group policy of...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 7 minutes ago
asked 7 minutes ago
asked 25 minutes ago
asked 34 minutes ago
asked 56 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 3 hours ago
asked 3 hours ago
asked 3 hours ago