Bullworks sponsors the establishment of BR corporation.Bullworks sells its receivables to BR which is a special purpose entity.Other information:

1) Bullworks owns 5% of the owners equity of BR.Rodeo Corporation owns the remaining 95%.

2) Owners equity constitutes 3% of the total assets of BR, the remaining 97% of total assets is financed through debt securitized by the receivables that Bullworks sells to BR.

Circumstance 1 (Circumstance 2 is in the next question)

Rodeo guarantees all of BR's debt.Rodeo appoints 10 of the 11 board members of BR with Bullworks appointing the remaining one member.

A.Explain if BR is a variable interest entity or not.Support your answers using the facts above.

B.Explain whether Bullworks or Rodeo must consolidate BR? Support your explanation with facts.