Answer and how to do problems - chapter 5 & 6

Answer and how to do problems - Chapter 5 & 6
Download Document
Showing pages : 1 of 2
This preview has blurred sections. Sign up to view the full version! View Full Document
On December 31, 2011, PanTech Company invests $20,000 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 interest in SoftPlus. Immediately after PanTech’s investment, SoftPlus presents the following balance sheet: Cash $ 20,000 Long-term debt $ 1 2 0, 0 0 0 Marketin g software 140,000 Noncontrolling interest 6 0, 0 0 0 Computer equipment 40,000 PanTech equity interest 2 0, 0 0 0 Total assets $ 200,000 Total liabilities and equity $ 2 0 0, 0 0 0 Each of the above amounts represents an assessed fair market value at December 31, 2011, except for the marketing software. (a) If the marketing software was undervalued by $20,000, what amounts for SoftPlus would appear in PanTech’s December 31, 2011, consolidated financial statements? (Credit balances should be entered with a minus sign. Omit the "$" sign in your response.)
Background image of page 1
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.