International 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.

The 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:

In addition to the assets reported on GP’s balance sheet, the following previously unreported intangible assets are identified. 

Required

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.

b. Prepare a consolidation working paper to consolidate IA and GP at the date of acquisition.

c. Prepare the consolidated balance sheet at the date of acquisition, in good form.

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Cash paid to GP shareholders.... Cash paid to consultants and lawyers. Fair value of new IA stock issued, 1,000 shares, $2 par Stock registration fees, paid in cash Fair value of earnings contingency.. $ 5,000 1,200 36,000 900 250