Submit Check my work On January 1, 2018, Access IT Company exchanged $840,000 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 $1,800,000. 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 45,000 $ 25,000 Investment in Net Connect 840,000 Capitalized software 965,000 140,000 Computer equipment 1,050,000 40,000 Communications equipment 900,000 320,000 Patent 175,000 Total assets $ 3,800,000 $ 700,000 Long-term debt $ (925,000) $ (680,000) Common stock-Access IT (2,500,000) (25,000) Common stock-Net Connect (375,000) (75,000) Retained earnings $(3,800,000) $(700,000) Total liabilities and equity $ 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 $1,260,000. 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 1 of 5 Check my work 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 $1,260,000. 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 NCI and Consolidated Totals columns should be entered with a minus sign.) ACCESS IT COMPANY AND NET CONNECT Consolidation Worksheet January 1, 2018 Consolidation Entries Access IT Net Connect Debit Credit $ 45,000 $ 25,000 840,000 965,000 140,000 1,050,000 40,000 900,000 320,000 Consolidated Balances NCI Cash Investment in NetConnect Capitalized software Computer equipment Communications equipment Research and development asset Patent Goodwill 175,000 $ 0 Total assets Long-term debt Common stock-Access IT $ 3,800,000 $ 700,000 $ (925,000) $ (600,000) (2,500,000) and Consolidated Totals columns should be entered with a minus sign.) Check my world Consolidated Balances ok ACCESS IT COMPANY AND NET CONNECT Consolidation Worksheet January 1, 2018 Consolidation Entries Access IT Net Connect Debit Credit $ 45,000 $ 25,000 840.000 965,000 140,000 1,050,000 40,000 900,000 320,000 NCI Cash Investment in NetConnect Capitalized software Computer equipment Communications equipment Research and development asset Patent ices 175,000 $ $ 0 $ 3,800,000 $ (925,000) (2,500,000) 700,000 (600,000) Goodwill Total assets Long-term debt Common stock-Access IT Common stock.NetConnect Retained earnings Noncontrolling interest Total liabilities and equity (25,000) (75,000) (375,000) $ (3,800,000) $ (700,000) $ 0 $ $ 0 Prev 1 of 5 E Next >