Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2021, Access IT Company exchanged $960,000 for 30 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT

image text in transcribed
image text in transcribed
image text in transcribed
On January 1, 2021, Access IT Company exchanged $960,000 for 30 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 $2,580,000. In contractual agreements with the sole owner of the remaining 70 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: (Note: Parentheses indicate credit balances.) Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 70 percent of Net Connect shares not owned by Access IT was estimated at $2,240,000. Each of the above amounts represents a fair value at January 1, 2021. The fair value of the 70 percent of Net Connect shares not owned by Access IT was estimated at $2,240,000. Prepare an acquisition-date consolidation worksheet for Access IT and its variable interest entity. (For accounts where multipl consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) ACCESS IT COMPANY AND NET CONNECT Consolldation Worksheet At January 1, 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Tracker Track Your Expenses And Grow Financially

Authors: Ester Penterman

1st Edition

B0CKVH74FZ

More Books

Students also viewed these Accounting questions