On December 31, 2017, PanTech Company invests $21,000 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 | $ | 21,000 | Long-term debt | $ | 126,000 | |||
Marketing software | 147,000 | Noncontrolling interest | 63,000 | |||||
Computer equipment | 42,000 | PanTech equity interest | 21,000 | |||||
Total assets | $ | 210,000 | Total liabilities and equity | $ | 210,000 | |||
Each of the above amounts represents an assessed fair value at December 31, 2017, except for the marketing software.
Accordingly the December 31 fair value of SoftPlus is assessed at $84,000.
If the marketing software was undervalued by $21,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements?
If the marketing software was overvalued by $21,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements?
On December 31, 2017, PanTech Company invests $21,000 in SoftPlus, a variable interest entity. In contractual...
On December 31, 2017, PanTech Company invests $39,000 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 Marketing software Computer equipment Total assets $ 39,000 273,000 78,000 $ 390,000 Long-term debt Noncontrolling interest PanTech equity interest Total liabilities and equity 234,000 117.ee 39.689 390,000 $ Each of...
please answer all parts On December 31, 2017, PanTech Company invests $43,000 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 Marketing software Computer equipment Total assets $ 43,000 301.000 86,000 $430,000 Long-term debt Noncontrolling interest Pantech equity interest Total liabilities and equity 258,000 129.000 43,000 430,000...
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Padre Company Sol Company Book Values Book Fair Values Values 12/31 12/31 12/31 $ 115,250 54,400 $ 54,400 240,750 353,000 353,000 440,000 286,000 341,300...
On January 1, 2017, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $200,500 reflected an assessment that all of Sysinger’s accounts were fairly valued within the company’s accounting records. During 2017, Sysinger reported net income of $108,600 and declared cash dividends of $32,500. Allan possessed the ability to influence significantly Sysinger’s operations and, therefore, accounted for this investment using the equity method. On January 1, 2018, Allan acquired an additional 80 percent interest in...
On January 1, 2017, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $200,500 reflected an assessment that all of Sysinger’s accounts were fairly valued within the company’s accounting records. During 2017, Sysinger reported net income of $108,600 and declared cash dividends of $32,500. Allan possessed the ability to influence significantly Sysinger’s operations and, therefore, accounted for this investment using the equity method. On January 1, 2018, Allan acquired an additional 80 percent interest in...
On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $6.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows: Current assets $ 14,000 Liabilities $ 212,000 Property and equipment (net) 268,000 Common...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $313,800. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $185,500. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $209,200. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $76,300 and an unrecorded customer list (15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $392,400. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $81,700 and an unrecorded customer list (15-year remaining life) assessed at a...
Following are financial statements for Moore Company and Kirby Company for 2018: Moore Kirby Sales $ (800,000 ) $ (600,000 ) Cost of goods sold 500,000 400,000 Operating and interest expenses 100,000 160,000 Net income $ (200,000 ) $ (40,000 ) Retained earnings, 1/1/18 $ (990,000 ) $ (550,000 ) Net income (200,000 ) (40,000 ) Dividends declared 130,000 0 Retained earnings, 12/31/18 $ (1,060,000 ) $ (590,000 ) Cash and receivables $ 217,000 $ 180,000 Inventory 224,000 160,000 Investment...
Following are financial statements for Moore Company and Kirby Company for 2018: $ Kirby (600,000) 400,000 160,000 (40,000) (550,000) (40,000) $ $ Sales Cost of goods sold Operating and interest expenses Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Kirby Equipment (net) Buildings Accumulated depreciation—buildings Other assets Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equity Moore $ (800,000) 500,000 100,000 $ (200,000) $ (990,000) (200,000) 130,000...