On December 31, 2020, Petra Company invests $42,000 in Valery, a variable interest entity. In contractual agreements completed on that date, Petra established itself as the primary beneficiary of Valery. Previously, Petra had no equity interest in Valery. Immediately after Petra’s investment, Valery presents the following balance sheet: Cash $ 42,000 Long-term debt $ 98,000 Marketing software 162,000 Noncontrolling interest 126,000 Computer equipment 62,000 Petra equity interest 42,000 Total assets $ 266,000 Total liabilities and equity $ 266,000 Each of the amounts represents an assessed fair value at December 31, 2020, except for the marketing software. The December 31 business fair value of Valery is assessed at $168,000. If the carrying amount of the marketing software was undervalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements? If the carrying amount of the marketing software was overvalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements?
On December 31, 2020, Petra Company invests $42,000 in Valery, a variable interest entity. In contractual agreements completed on that date, Petra established itself as the primary beneficiary of Valery. Previously, Petra had no equity interest in Valery. Immediately after Petra’s investment, Valery presents the following balance sheet: Cash $ 42,000 Long-term debt $ 98,000 Marketing software 162,000 Noncontrolling interest 126,000 Computer equipment 62,000 Petra equity interest 42,000 Total assets $ 266,000 Total liabilities and equity $ 266,000 Each of the amounts represents an assessed fair value at December 31, 2020, except for the marketing software. The December 31 business fair value of Valery is assessed at $168,000. If the carrying amount of the marketing software was undervalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements? If the carrying amount of the marketing software was overvalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On December 31, 2020, Petra Company invests $42,000 in Valery, a variable interest entity. In contractual agreements completed on that date, Petra established itself as the primary beneficiary of Valery. Previously, Petra had no equity interest in Valery. Immediately after Petra’s investment, Valery presents the following
| Cash | $ | 42,000 | Long-term debt | $ | 98,000 |
| Marketing software | 162,000 | Noncontrolling interest | 126,000 | ||
| Computer equipment | 62,000 | Petra equity interest | 42,000 | ||
| Total assets | $ | 266,000 | Total liabilities and equity | $ | 266,000 |
Each of the amounts represents an assessed fair value at December 31, 2020, except for the marketing software.
The December 31 business fair value of Valery is assessed at $168,000.
-
If the carrying amount of the marketing software was undervalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements?
-
If the carrying amount of the marketing software was overvalued by $47,000, what amounts for Valery would appear in Petra’s December 31, 2020, consolidated financial statements?
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required A
Required B
If the carrying amount of the marketing software was undervalued by $36,000, what amounts for Valery would appear in
Petra's December 31, 2020, consolidated financial statements? (Input all amounts as positive values.)
Account
Amount
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required A
Required B
If the carrying amount of the marketing software was overvalued by $36,000, what amounts for Valery would appear in
Petra's December 31, 2020, consolidated financial statements? (Input all amounts as positive values.)
Account
Amount
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