Pratt Company acquired all of Spider, Inc.'s outstanding shares on

Pratt Company acquired all of Spider, Inc.'s outstanding shares on December 31, 2013, 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

        __________________________________ _Book Values _______Fair Values

Computer software . . . . . . . . . . . . . . . . . . . . . . $ 20,000 ....................$ 70,000

Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 ......................30,000


Client contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- ......................100,000

In-process research and development . . . . . . . . . . .-0- ...................... 40,000

Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . (60,000) ................... (65,000)

At December 31, 2013, the following financial information is available for consolidation:


Pratt Company acquired all of Spider, Inc.'s outstanding shares on

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2013.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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