problem 25

C. Identify the risks of ownership of the R&D facility that (1) TecPC has effectively shifted to the VIE's owners and (2) remain with TecPC. d. What characteristics of a primary beneficiary does TecPC possess? 25. On December 31, 2017, Pan Tech Company invests $20,000 in SoftPlus, a variable interest entity. In contractual agreements completed on that date. Pan Tech established itself as the primary benefi- ciary of SoftPlus. Previously, Pan Tech had no equity interest in SoftPlus. Immediately after Pan- Tech's investment, SoftPlus presents the following balance sheet: Cash Marketing software Computer equipment Total assets $ 20,000 140,000 40,000 $200,000 Long-term debt Noncontrolling interest PanTech equity interest Total liabilities and equity $120.000 60,000 20.000 $200.000 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 $80,000. a. If the marketing software was undervalued by $20,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements? b. If the marketing software was overvalued by $20,000, what amounts for SoftPlus would appear in PanTech's December 31, 2017, consolidated financial statements? 26. On January 1, 2018, Access IT Company exchanged $1,000,000 for 40 percent of the outstanding