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Problem 6-26 (LO 6-2) On January 1, 2018, Access IT Company exchanged $970,000 for 40 percent of the outstanding voting stock Sf Net Connect. Especially

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Problem 6-26 (LO 6-2) On January 1, 2018, Access IT Company exchanged $970,000 for 40 percent of the outstanding voting stock Sf 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 $1.930,000. 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: Net Connect $ 38,000 Recess IT 58.000 970,000 978.000 1,063,000 913.000 Cash Investment in Net Connect Capitalized software Computer equipment Communications equipment Patent Total assets Long-term debt Common stock heces IT Common stock.Net Connect Retained earnings Total liabilities and equity 153,000 53,000 333,000 188,000 $ 765,000 $ (613,000) $ 3,982,000 1938,000) (2,630,000) (414,000). $(3,982,000) (38.000) (114.000) $ (765,000) 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 $1.455,000 Prepare an acquisition date consolidated worksheet for Access IT and its variable interest entity. (For accounts where multiple 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. Amounts in the Debit and credit columns should be entered as positive. Negative amounts for the NCT and Consolidated Totals columns should be entered with a minus sign.)

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