Assignment:
Memo detail informations and sample memo are in the file.
Please follow the file and note I wrote on the side.
Write a memo to Katy that will accomplish the following:
1. Explain when variable interest entities need to be consolidated with their sponsoring company
2. Determine if the facts and circumstances associated with the establishment of TCR dictate that consolidation will be required (or can the equity method be employed) in order for Gateway Tech to be in compliance with GAAP, and
3. Determine the debt to assets ratio for Gateway Tech (without consolidation) and what the company's debt to assets ratio will be if consolidation is required. discuss the possible implication of this million in cash provided by operations in the most recent fiscal year and TCR's expected operation cash flows are uncertain.