Piedmont Corporation acquired all of the voting stock of Stearns Company. Below is information on acquisition costs, and the separate balance sheets of Piedmont and Stearns, as well as the consolidated balance sheet, immediately after the acquisition. All amounts are in thousands.

Required

a. Prepare Piedmont’s separate balance sheet just prior to the acquisition.

b. Reconstruct eliminating entries (E) and (R) to consolidate the balance sheet.

c. Prepare a schedule calculating the excess of acquisition cost over book value and its allocation to Stearns’ identifiable net assets and goodwill.

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Cash paid to Stearns' former owners Fair value of stock issued to Stearns' former owners Merger-related transactions costs, paid in cash. Stock registration fees on stock issued. Fair value of earnout... $ 95,000 120,000 500 700 5,000 Current assets Plant assets, net. Identifiable intangibles Investment in Stearns.. Goodwill... Total assets Piedmont $ 40,000 360,000 Stearns $ 15,000 140,000 Consolidated $ 55,000 470,000 - 100,000 220,000 135,000 $620,000 $155,000 $760,000 Liabilities..... $220,000 $140,000 $360,000 Capital stock 300,000 40,000 300,000 Retained earnings 100,000 (25,000) 100,000 Total liabilities and equity.. $620,000 $155,000 $760,000