2. P&G acquires all of the voting stock of Gillam Co. on January 1, 2017 at an acquisition cost of $20,000,000. Gillams balance sheet at the date of acquisition is as follows (in thousands):

Gillam Co.
(in thousands)	Book Value Dr (Cr)	Fair Value Dr (Cr)
Current assets	$ 100	$ 100
Plant & equipment	5,000	8,000
Patents	200	2,000
Customer order backlog	0	4,000
Trademarks	0	2,000
Current liabilities	(200)	(200)
Long-term liabilities	(1,400)	(1,500)
Common stock	(500)
Additional paid-in capital	(2,000)
Retained earnings	(1,200)
Total	$ 0

Goodwill connected with this acquisition is $5,600,000. As of January 1, 2017, the revaluations have the following estimated lives (all straight-line):

Plant & equipment 20 years Patents 10 years Customer order backlog 5 years Trademarks 10 years Long-term liabilities 5 years

P&G uses the complete equity method to account for its investment in Gillam. Goodwill impairment losses are $300,000 in 2017 and $50,000 in 2018. The December 31, 2018 trial balances for P&G and Gillam appear in the consolidation working paper provided below.

1. Show the computation of goodwill resulting from this acquisition.
2. Compute P&G equity in net income of Giliam for 2018.
3. Prepare all journal entries related to the investment made by P&G during 2018 (using the complete equity method).
4. Prepare the elimination entries made in consolidation at December 31, 2018.
5. Complete consolidation workpaper below.

(in thousands) P&G Gillam Dr (Cr) Dr (Cr) Current assets $ 4,200 $ 150 Plant & equipment, net 260,000 10,600 Patents 200 Investment in Gillam

20,730 Customer order backlog Trademarks Goodwill Current liabilities (11,290) (250) Long-term liabilities (156,900) (3,300) Common stock (4,000) (500) Additional paid-in capital (40,000) (2,000) Retained earnings, Jan. 1 (70,000) (3,100) Dividends 800 100 Sales revenue (25,000) (10,000) Equity in net income of Gillam (540) Cost of goods sold 15,000 6,000 Operating expenses 7,000 2,100 Total $ 0 $ 0

Prepare the consolidated statement of comprehensive income (income statement and comprehensive income) for 2018 and the consolidated balance sheet at December 31, 2018.