On December 31, 2017, PanTech Company invests $42,000 in SoftPlus, a variable interest entity. In contractual

agreements completed on that date, PanTech established itself as the primary beneficiary of SoftPlus. Previously, PanTech had no equity interest in SoftPlus. Immediately after PanTech’s investment, SoftPlus presents the following balance sheet:

            Cash $ 42,000 Long-term debt $ 252,000

Marketing software   294,000 Noncontrolling interest   126,000

Computer equipment   84,000 PanTech equity interest   42,000

Total assets $ 420,000 Total liabilities and equity $ 420,000

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 $168,000.

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