Question 1: When are intangible assets recognizable to the investor?

Question 2: Prepare a consolidated balance sheet for Pratt and Spider as of December 31,2018.

Pratt Company acquired all of Spider, Inc.'s outstanding shares on December 31, 2018, 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: Computer software.. Equipment Client contracts In-process research and development Notes payable.. Book Values $ 20,000 40,000 -0- -0- (60,000) Fair Values $ 70,000 30,000 100,000 40,000 (65,000) At December 31, 2018, the following financial information is available for consolidation: Cash Receivables Inventory... Investment in Spider Computer software. Pratt $ 36,000 116,000 140,000 495.000 210,000 Spider $ 18,000 52.000 90,000 -O- 20,000 (continued) 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. 595,000 308,000 -O- -a $ 1,900,000 $ (88,000) (510,000) (380,000) (170,000) (752,000) $(1,900,000 130,000 40,000 -0- -0- $ 350,000 $ (25,000) (60,000) (100,000) (25,000) (140,000) $(350,000 Pratt Company acquired all of Spider, Inc.'s outstanding shares on December 31, 2018, 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: Computer software.. Equipment Client contracts In-process research and development Notes payable.. Book Values $ 20,000 40,000 -0- -0- (60,000) Fair Values $ 70,000 30,000 100,000 40,000 (65,000) At December 31, 2018, the following financial information is available for consolidation: Cash Receivables Inventory... Investment in Spider Computer software. Pratt $ 36,000 116,000 140,000 495.000 210,000 Spider $ 18,000 52.000 90,000 -O- 20,000 (continued) 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. 595,000 308,000 -O- -a $ 1,900,000 $ (88,000) (510,000) (380,000) (170,000) (752,000) $(1,900,000 130,000 40,000 -0- -0- $ 350,000 $ (25,000) (60,000) (100,000) (25,000) (140,000) $(350,000