Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $507,950 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider's book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider's fair and book value differences as follows: Book Values Fair Values $ 78,600 40,700 114,000 30,500 (81,950) Computer software Equipment Client contracts $ 29,000 55,800 In-process research and development Notes payable (72,900) At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses): Spider $ 18,400 87,000 86,000 Pratt Cash 8,950 103,500 152,500 507,950 227,000 604,750 358,000 Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts 29,000 130,500 55,800 Goodwill Total assets $ 1,962,650 $ 406,700 Accounts payable Notes payable Common stock (90,400) $ (44,000) (514,250) (380,000) (170,000) ( 808,000) 2$ (72,900) (100,000) (25,000) (164,800) Additional paid-in capital Retained earnings Total liabilities and equities $(1,962,650) $ (406,700) Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021.
Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $507,950 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider's book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider's fair and book value differences as follows: Book Values Fair Values $ 78,600 40,700 114,000 30,500 (81,950) Computer software Equipment Client contracts $ 29,000 55,800 In-process research and development Notes payable (72,900) At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses): Spider $ 18,400 87,000 86,000 Pratt Cash 8,950 103,500 152,500 507,950 227,000 604,750 358,000 Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts 29,000 130,500 55,800 Goodwill Total assets $ 1,962,650 $ 406,700 Accounts payable Notes payable Common stock (90,400) $ (44,000) (514,250) (380,000) (170,000) ( 808,000) 2$ (72,900) (100,000) (25,000) (164,800) Additional paid-in capital Retained earnings Total liabilities and equities $(1,962,650) $ (406,700) Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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Transcribed Image Text:PRATT COMPANY AND SUBSIDIARY
Worksheet for a Consolidated Balance Sheet
December 31, 2021
Pratt
Spider
Debit
Credit
Consolidated
Cash
$
8,950 $
18,400
Receivables
103,500
87,000
Inventory
152,500
86,000
Investment in Spider
507,950
Computer software
227,000
29,000
Buildings (net)
Equipment (net)
604,750
130,500
358,000
55,800
Client contracts
Research and development asset
Goodwill
Total assets
$ 1,962,650
$
406,700
$
Accounts payable
$
(90,400) $
(44,000)
Notes payable
(514,250)
(72,900)
Common stock
(380,000)
(100,000)
Additional paid-in capital
(170,000)
(25,000)
Retained earnings
(808,000)
(164,800)
Total liabilities and equities
$ (1,962,650)
$
(406,700) $
Transcribed Image Text:Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $507,950
cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity.
Although many of Spider's book values approximate fair values, several of its accounts have fair values that
differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its
books. In deriving the acquisition price, Pratt assessed Spider's fair and book value differences as follows:
Book Values Fair Values
Computer software
Equipment
Client contracts
$ 29,000
55,800
$ 78,600
40,700
114,000
30,500
(81,950)
In-process research and development
Notes payable
(72,900)
At December 31, 2021, the following financial information is available for consolidation (credit balances in
parentheses):
Spider
$ 18,400
87,000
86,000
Pratt
Cash
$
8,950
103,500
152,500
507,950
227,000
604,750
358,000
Receivables
Inventory
Investment in Spider
Computer software
Buildings (net)
Equipment (net)
Client contracts
29,000
130,500
55,800
Goodwill
Total assets
$ 1,962,650
$ 406,700
Accounts payable
Notes payable
(90,400) $ (44,000)
$
(514,250)
(380,000)
(170,000)
(808,000)
$(1,962,650) $(406,700)
(72,900)
(100,000)
(25,000)
(164,800)
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021.
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