Consolidated Balance Sheet Working Paper, Identifiable IntangiblesInternational Auto (IA) acquires all of the stock of Genuine Parts (GP) and reports the acquisition as a stock investment on its own books. The acquisition involves the following payments. All amounts are in thousands.Cash paid to GP shareholders$10,0002,400Cash paid to consultants and lawyersFair value of new IA stock issued, 1,000 shares, $4 par 72,0001,800500Stock registration fees, paid in cashFair value of earnings contingencyThe earnings contingency, if paid, will occur three years subsequent to the acquisition. The balance sheet accounts of GP and IA, just prior to the acquisition, are as follows:InternationalAuto(in thousands)Current assetsFixed assets, netTrademarksCurrent liabilitiesLong-term liabilitiesCommon stock, par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive incomeTreasury stockTotalBook ValueDr (Cr)$60,000840,000178,000(50,000)(700,000)(16,000)(220,000)(90,000)(8,000)6,000$0Genuine PartsBook Value Fair ValueDr (Cr)Dr (Cr)$2,00054,0006,800(800)(52,000)(1,000)(17,000)4,0002,8001,200$0$2,40040,00012,000(800)(50,000)In addition to the assets reported on GPs balance sheet, the following previously unreported intangible assets are identified. Note: Some of these intangibles may not be separately capitalized per ASC Topic 805.(in thousands)Fair valueLicensing agreements$4,800Skilled workforce30,000Order backlogs10,000Future synergies between IA and GP supply chains3,200 a. Prepare a schedule calculating the excess of acquisition cost over GP's book value, and its allocation to GP's identifiable net assets and goodwill.• When appropriate, use negative signs with your excess of fair value over book value answers (left column only).• Do not use negative signs with answers in the right column.• Enter answers in thousands.Acquisition costGP book valueExcess of acquisition cost over book valueExcess of fair value over book value:Current assetsFixed assets, netTrademarksLong-term liabilitiesGoodwill4$$$$

Acquisition cost, occasionally appertained to as book value or asset book value, is a cost…

Prepare • When appropriate, use negative signs with your excess of fair value over book value answers (left column only). • Do not use negative signs with answers in the right column. • Enter answers in thousands. Acquisition cost GP book value Excess of acquisition cost over book value Excess of fair value over book value: Current assets Fixed assets, net Trademarks Long-term liabilities Goodwill 4 O $ $ het assets and goodw

Prepare • When appropriate, use negative signs with your excess of fair value over book value answers (left column only). • Do not use negative signs with answers in the right column. • Enter answers in thousands. Acquisition cost GP book value Excess of acquisition cost over book value Excess of fair value over book value: Current assets Fixed assets, net Trademarks Long-term liabilities Goodwill 4 O $ $ het assets and goodw

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 28E

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