On December 31, 2014, PanTech Company invests $20,000 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

$

20,000  

 Long-term debt

$

120,000  

 Marketing software

140,000  

 Noncontrolling interest

60,000  

 Computer equipment

40,000  

 PanTech equity interest

20,000  

 Total assets

$

200,000  

 Total liabilities and equity

$

200,000  

Each of the above amounts represents an assessed fair value at December 31, 2014, except for the marketing software.

a.

If the marketing software was undervalued by $20,000, what amounts for SoftPlus would appear in PanTech’s December 31, 2014, consolidated financial statementounts?

b.

If the marketing software was overvalued by $20,000, what amounts for SoftPlus would appear in PanTech’s December 31, 2014, consolidated financial statements?

Account

Amount