7 Problem 2-30 (Algo) (LO 2-4,2-5, 2-7, 2-8) 16 points Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, 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: eBook Computer software Equipment Client contracts In-process research and development Notes payable Book Values Fair Values $ 49,500 $ 88,500 55,500 36,400 105,000 0 29,750 (104,000) (112,850) Print References At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables 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 Spider $ 15,500 $ 19,200 117,000 57,900 165,000 103,900 478, 050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530, 750) (104,000) (380,000) (100,000) (170,000) (25,000) (768,000) (164,000) $(1,945,050) $ (458,500) 7 Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021. 16 points Credit Consolidated Cash eBook Receivables PRATT COMPANY AND SUBSIDIARY Worksheet for a Consolidated Balance Sheet December 31, 2021 Pratt Spider Debit $ 15,500 $ 19,200 117,000 57,900 165,000 103,900 478,050 250,000 49,500 600,500 172,500 319,000 55,500 Print References 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 $ 0 $ 1,945,050 $ $ (96,300) $ (530,750) (380,000) (170,000) (768,000) $ (1,945,050) $ 458,500 (65,500) (104,000) (100,000) (25,000) (164,000) (458,500) $ 0 $ 0 $ 0 7 Problem 2-30 (Algo) (LO 2-4,2-5, 2-7, 2-8) 16 points Pratt Company acquired all of the outstanding shares of Spider, Inc., on December 31, 2021, 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: eBook Computer software Equipment Client contracts In-process research and development Notes payable Book Values Fair Values $ 49,500 $ 88,500 55,500 36,400 105,000 0 29,750 (104,000) (112,850) Print References At December 31, 2021, the following financial information is available for consolidation (credit balances in parentheses): Cash Receivables 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 Spider $ 15,500 $ 19,200 117,000 57,900 165,000 103,900 478, 050 0 250,000 49,500 600,500 172,500 319,000 55,500 0 0 0 $ 1,945,050 $ 458,500 $ (96,300) $ (65,500) (530, 750) (104,000) (380,000) (100,000) (170,000) (25,000) (768,000) (164,000) $(1,945,050) $ (458,500) 7 Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2021. 16 points Credit Consolidated Cash eBook Receivables PRATT COMPANY AND SUBSIDIARY Worksheet for a Consolidated Balance Sheet December 31, 2021 Pratt Spider Debit $ 15,500 $ 19,200 117,000 57,900 165,000 103,900 478,050 250,000 49,500 600,500 172,500 319,000 55,500 Print References 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 $ 0 $ 1,945,050 $ $ (96,300) $ (530,750) (380,000) (170,000) (768,000) $ (1,945,050) $ 458,500 (65,500) (104,000) (100,000) (25,000) (164,000) (458,500) $ 0 $ 0 $ 0