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Pratt Company acquired all of the outstanding shares of Spider, Incorporated, on December 31, 2024, for $478,050 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: Items Book Values Fair Values Computer software Equipment Client contracts Notes payable In-process research and development $ 49,500 $ 88,500 55,500 36,400 0 105,000 0 (104,000) 29,750 (112,850) At December 31, 2024, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables Items Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities Pratt $ 15,500 117,000 165,000 Spider $ 19,200 57,900 103,900 478,050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530,750) (380,000) (170,000) (768,000) $ (1,945,050) (104,000) (100,000) (25,000) (164,000) $ (458,500) Required: Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2024. Assets PRATT COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 2024 Liabilities and Owners' Equity Cash Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities

Pratt Company acquired all of the outstanding shares of Spider, Incorporated, on December 31, 2024, for $478,050 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: Items Book Values Fair Values Computer software Equipment Client contracts Notes payable In-process research and development $ 49,500 $ 88,500 55,500 36,400 0 105,000 0 (104,000) 29,750 (112,850) At December 31, 2024, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables Items Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities Pratt $ 15,500 117,000 165,000 Spider $ 19,200 57,900 103,900 478,050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530,750) (380,000) (170,000) (768,000) $ (1,945,050) (104,000) (100,000) (25,000) (164,000) $ (458,500) Required: Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2024. Assets PRATT COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 2024 Liabilities and Owners' Equity Cash Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pratt Company acquired all of the outstanding shares of Spider, Incorporated, on December 31, 2024, for $478,050 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: Items Book Values Fair Values Computer software Equipment Client contracts Notes payable In-process research and development $ 49,500 $ 88,500 55,500 36,400 0 105,000 0 (104,000) 29,750 (112,850) At December 31, 2024, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables Items Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities Pratt $ 15,500 117,000 165,000 Spider $ 19,200 57,900 103,900 478,050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530,750) (380,000) (170,000) (768,000) $ (1,945,050) (104,000) (100,000) (25,000) (164,000) $ (458,500)
Transcribed Image Text:Pratt Company acquired all of the outstanding shares of Spider, Incorporated, on December 31, 2024, for $478,050 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: Items Book Values Fair Values Computer software Equipment Client contracts Notes payable In-process research and development $ 49,500 $ 88,500 55,500 36,400 0 105,000 0 (104,000) 29,750 (112,850) At December 31, 2024, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables Items Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities Pratt $ 15,500 117,000 165,000 Spider $ 19,200 57,900 103,900 478,050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530,750) (380,000) (170,000) (768,000) $ (1,945,050) (104,000) (100,000) (25,000) (164,000) $ (458,500)
Required: Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2024. Assets PRATT COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 2024 Liabilities and Owners' Equity Cash Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities
Transcribed Image Text:Required: Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2024. Assets PRATT COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 2024 Liabilities and Owners' Equity Cash Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities
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