Acc407 Advanced Accounting: P2-20 Pratt Company acquired all of Spider, Inc's outstanding shares

Acc407 Advanced Accounting

P2-20
Pratt Company acquired all of Spider, Inc's outstanding shares on December 31, 2011, 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 Sprider'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 - 100,000
In-process research and development - 40,000
Notes payable (60,000) (65,000)

At December 31, 2011, the following financial information is available for consolidation:
(Please refer to the next tab - P02-20 Entry for financial information)

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2011.
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