question archive Pratt Company acquired all of Spider, Inc 's outstanding shares on December 31, 2015, for $499,450 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
Pratt Company acquired all of Spider, Inc 's outstanding shares on December 31, 2015, for $499,450 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
Subject:AccountingPrice: Bought3
Pratt Company acquired all of Spider, Inc 's outstanding shares on December 31, 2015, for $499,450 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 Fair Computer software Equipment Client contracts In-process research and development Notes payable Values Values $ 30,000 S 61,750 57,100 0 120,800 34,250 (96,000) (105,200) 70,000 At December 31, 2015, the following financial information is available for consolidation: Spider Pratt 104,000 499,450 Receivables Inventory Investment in Spider Computer software Buildings (net) Equipment (net) Client contracts Goodwill $ 9,750 10,600 66.500 133,500 103,500 0 30,000 613.500 172.400 70,000 0 241,000 314,000 0 Total assets $ 1,915,200 453,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings S (89,700) $ (68,500) (511,500) (96,000) (380,000) (100,000) (170,000) (25,000) (764,000) (163,500) Total liabilities and equities $(1,915,200) $(453,000) Note: Parentheses indicate a credit balance
