On January 1, 2018, Access IT Company exchanged $1,040,000 for 40 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect's financial records, the fair value of the research project was considered to be $2,000,000.

In contractual agreements with the sole owner of the remaining 60 percent of Net Connect, Access IT was granted (1) various decision-making rights over Net Connect's operating decisions and (2) special service purchase provisions at below-market rates. As a result of these contractual agreements, Access IT established itself as the primary beneficiary of Net Connect. Immediately after the purchase, Access IT and Net Connect presented the following balance sheets:

	Access IT				Net Connect
Cash	$	65,000			$	45,000
Investment in Net Connect		1,040,000
Capitalized software		985,000				160,000
Computer equipment		1,070,000				60,000
Communications equipment		920,000				340,000
Patent						195,000
Total assets	$	4,080,000			$	800,000
Long-term debt	$	(945,000	)		$	(620,000	)
Common stock-Access IT		(2,700,000	)
Common stock-Net Connect						(45,000	)
Retained earnings		(435,000	)			(135,000	)
Total liabilities and equity	$	(4,080,000	)		$	(800,000	)

Each of the above amounts represents a fair value at January 1, 2018. The fair value of the 60 percent of Net Connect shares not owned by Access IT was $1,560,000.

Prepare an acquisition-date consolidated worksheet for Access IT and its variable interest entity.

ACCESS IT COMPANY AND NET CONNECT
Consolidation Worksheet
January 1, 2018
			Consolidation Entries			Consolidated
	Access IT	Net Connect	Debit	Credit	NCI	Balances
Cash	$65,000	$45,000				$110,000
Investment in NetConnect	1,040,000
Capitalized software	985,000	160,000				1,145,000
Computer equipment	1,070,000	60,000				1,130,000
Communications equipment	920,000	340,000				1,260,000
Research and development asset
Patent		195,000				195,000
Goodwill
Total assets	$4,080,000	$800,000				$3,840,000
Long-term debt	$(945,000)	$(620,000)				$(1,565,000)
Common stock-Access IT	(2,700,000)					(2,700,000)
Common stock-NetConnect		(45,000)
Retained earnings	(435,000)	(135,000)
Noncontrolling interest
Total liabilities and equity	$(4,080,000)	$(800,000)	$0	$0		$(4,265,000)