Pratt Company acquired all of Spider, Inc.'s outstanding shares on December 31, 2015, 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 Fair Values Values Computer software 57,000 97,250 Equipment 55,000 37,200 Client contracts 107,500 29,500 In-process research and development (78,000) (84,000) Notes payable At December 31, 2015, the following financial information is available for consolidation Pratt Spider Cash 31,700 32,400 74,500 147,500 Receivables Inventory 146,000 1,000 504,450 Investment in Spider Computer software 226,500 57,000 569,250 146,500 Buildings (net) 311,000 55,000 Equipment (net) Client contracts Goodwi Total assets 1,936,400 446,400 Accounts payable (94,900) (73,400) Notes payable (524,500) (78,000) Common stock (380,000) (100,000) Additional paid-in capital (170,000) (25,000) Retained earnings (767,000) (170,000) Total liabilities and equities $(1,936,400) $(446,400) Note: Parentheses indicate a credit balance