On December 31, Year 4, Russell Inc. invested $20,000 in Charger Corp. Prior to this Russell had no interest in Charger. Upon review of the documentation related to Russell€™s investment, the controller of Russell determined that Charger is a variable interest entity and Russell is its primary beneficiary. Immediately after
Russell€™s investment, Charger Corp. prepared the following balance sheet:

Each of the above amounts represents the fair value at December 31, Year 4, except for marketing software. Charger Corp. is carrying on a business.
Required:
(a) If the marketing software was undervalued by $20,000, what reported amounts for Charger€™s financial statement items would appear in Russell€™s December 31, Year 4, consolidated balance sheet?
(b) If the marketing software was overvalued by $20,000, what reported amounts for Charger€™s financial statement items would appear in Russell€™s December 31, Year 4, consolidated balance sheet?
(c) Calculate goodwill and non-controlling interest for part (b) under parent company extension theory.

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Cash Marketing software Computer equipment 20,000 140,000 40,000 $200,000 Long-term debt Russell equity interest Non-controlling interest $120,000 20,000 60,000 S200,000