Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $531,550 cash. Pratt will operateSpider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider's book valuesapproximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internallydeveloped assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider's fair and bookvalue differences as follows:Computer softwareEquipmentClient contractsIn-process research and developmentNotes payableCashReceivablesInventoryInvestment in SpiderComputer softwareBuildings (net)Equipment (net)At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses):Client contractsGoodwillTotal assetsAccounts payableNotes payableCommon stockAdditional paid-in capitalRetained earningsTotal liabilities and equitiesBook Values Fair Values$ 57,700 $ 116,95040,500 25,500109,00039,000(105,200)$00(95,500)PrattSpider15,000 $ 38,300122,000160,000531,550217,000611,250321,0000063,500116,000057,700146,00040,50000$ 1,977,800 $ 462,000$(92,300) $ (57,500)(523,500)(95,500)(380,000)(100,000)(170,000)(25,000)(812,000)(184,000)$(1,977,800) $ (462,000) Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021.CashReceivablesInventoryInvestment in SpiderComputer softwareBuildings (net)Equipment (net)Client contractsResearch and development assetGoodwillTotal assetsAccounts payableNotes payableCommon stockAdditional paid-in capitalRetained earningsTotal liabilities and equitiesPRATT COMPANY AND SUBSIDIARYWorksheet for a Consolidated Balance Sheet$Pratt$$December 31, 2021Spider15,000 $122,000160,000531,550217,000611,250321,00038,30063,500116,00057,700146,00040,5001,977,800 $462,000(92,300) $ (57,500)(523,500)(95,500)(380,000)(100,000)(170,000)(25,000)(812,000)(184,000)$ (1,977,800) $(462,000) $Debit0 $Credit0Consolidated$$0

Particulars Amount($)Amount($)Consideration transferred at fair value531,550Book value309,000Excess…

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021. 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 AND SUBSIDIARY Worksheet for a Consolidated Balance Sheet $ Pratt $ S December 31, 2021 Spider 15,000 $ 122,000 160,000 531,550 217,000 611,250 321,000 1,977,800 $ (92,300) $ (523,500) (380,000) (170,000) (812,000) $ (1,977,800) $ 38,300 63,500 116,000 57,700 146,000 40,500 462,000 (57,500) (95,500) (100,000) (25,000) (184,000) (462,000) $ Debit 0 $ Credit Consolidated $ 0 $ 0 0

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021. 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 AND SUBSIDIARY Worksheet for a Consolidated Balance Sheet $ Pratt $ S December 31, 2021 Spider 15,000 $ 122,000 160,000 531,550 217,000 611,250 321,000 1,977,800 $ (92,300) $ (523,500) (380,000) (170,000) (812,000) $ (1,977,800) $ 38,300 63,500 116,000 57,700 146,000 40,500 462,000 (57,500) (95,500) (100,000) (25,000) (184,000) (462,000) $ Debit 0 $ Credit Consolidated $ 0 $ 0 0

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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