Reference no: EM133922966
Problem
On December 31, 2023, Petra Company invests $27,000 in Valery, a variable interest entity. In contractual agreements completed on that date, Petra established itself as the primary beneficiary of Valery. Previously, Petra had no equity interest in Valery. Immediately after Petra's investment, Valery presents the following balance sheet:
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Cash
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$ 27,000
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Long-term debt
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$ 113,000
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Marketing software
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147,000
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Noncontrolling interest
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81,000
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Computer equipment
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47,000
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Petra equity interest
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27,000
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Total assets
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$ 221,000
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Total liabilities and equity
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$ 221,000
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Each of the amounts represents an assessed fair value at December 31, 2023, except for the marketing software.
The December 31 business fair value of Valery is assessed at $108,000.
Task
1) If the carrying amount of the marketing software was undervalued by $32,000, what amounts for Valery would appear in Petra's December 31, 2023, consolidated financial statements? Get the instant assignment help.
2) If the carrying amount of the marketing software was overvalued by $32,000, what amounts for Valery would appear in Petra's December 31, 2023, consolidated financial statements?
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What amounts for valery would appear in petras december
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