ADV. ACCT LOOSELEAF W/ CONNECT ACCESS
13th Edition
ISBN: 9781266324857
Author: Hoyle
Publisher: MCG
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Chapter 2, Problem 29P
To determine
Prepare a consolidated
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Pratt Company acquired all of Spider, Inc.'s outstanding shares on December 31, 2017, for $495,000 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:
Computer software
Equipment
Client contracts
In-process research and development
Notes payable
Cash
Receivables
Inventory
Investment in Spider
Computer software
Buildings (net)
Equipment (net)
Client contracts
Goodwill
Book
Values
0
0
(60,000)
At December 31, 2017, the following financial information is available for consolidation:
Pratt
Total Assets
$20,000
40,000
$36,000
116,000
140,000
495,000
210,000
595,000
308,000
0
0
$1,900,000
$(88,000)
(510,000)…
Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $488,900 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
$
28,000
$
68,750
Equipment
69,500
59,400
Client contracts
0
112,000
In-process research and development
0
24,500
Notes payable
(72,500
)
(79,000
)
At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses):
Pratt
Spider
Cash
$
18,700
$
16,000
Receivables
118,500
57,500…
Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, for $504,450 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
$ 57,000
$ 97,250
Computer software
Equipment
Client contracts
55,000
37, 200
107,500
29,500
(84,000)
In-process research and development
Notes payable
(78,000)
At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses):
Spider
32,400
74,500
81,000
Pratt
Cash
24
31,700
147,500
146,000
504,450
226,500
569, 250
311,000
Receivables
Inventory
Investment in Spider
Computer…
Chapter 2 Solutions
ADV. ACCT LOOSELEAF W/ CONNECT ACCESS
Ch. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Problems 19 and 20 are based on the following...Ch. 2 - In the December 31, 2017, consolidated balance...Ch. 2 - Prob. 21PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35APACh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 37APBCh. 2 - Prob. 38APBCh. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYSCh. 2 - Prob. 4DYS
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