Consolidation with Previously Unrecorded Intangibles and Goodwill Brightcove, Inc. acquires all of the stock of Ciber, Inc. for $112.5 million in cash and accounts for the acquisition as a stock acquisition. Balance sheet information at the date of acquisition is as follows (in thousands): Brightcove, Inc. Ciber, Inc. Book Value Book Value Fair Value Dr (Cr) Dr (Cr) Dr (Cr) Current assets $157,500 $900 $675 Plant and equipment, net 450,000 27,000 9,000 Licenses and trademarks 11,250 15,750 Investment in Ciber 112,500 Current liabilities (180,000) (1,800) (1,800) Long-term liabilities Capital (337,500) (22,500) (24,750) stock Retained earnings Total (78,750) (18,000) (123,750) $0 3,150 $0 Brightcove hires a consultant to identify and value any previously unreported intangible assets attributable to Ciber at the date of acquisition. The consultant identifies the following intangibles: Fair Value Customer (in thousands) contracts $2,250 Assembled workforce 45,000 Brand names Leases at rents below current market 11,250 900 Brand names Leases at rents below current 11,250 market 900 Developed technology 3,375 In-process research and development Future cost savings from elimination of duplicate assets Additional expected revenues from bundling products 675 1,800 1,350 a. Prepare a schedule of the excess of acquisition cost over Ciber's book value and its allocation to Ciber's identifiable net assets and goodwill. (all amounts in thousands) When appropriate, use negative signs with your excess of fair value over book value answers (left column only). Do not use negative signs in the right column. Enter answers in thousands. Acquisition cost Ciber book value Excess of acquisition cost over book value Excess of fair value over book value: Current assets Plant and equipment, net Licenses and trademarks Long term liabilities Customer contracts Brand names $ 0 0 0 0 0 0 0 $ 0 0 $ 0 Goodwill 0 0 0 $ 0 b. Prepare a working paper to consolidate the balance sheet accounts of Brightcove and Ciber at the date of acquisition. (all amounts in thousands) Use negative signs with your credit balance answers in the Consolidated Balances column. Consolidation Working Paper Accounts Taken From Books (in thousands) Brightcove Dr (Cr) Ciber Eliminations Current assets Plant and equipment net Licenses and trademarks Investment in Ciber $157,500 450,000 Dr (Cr) Debit Credit Consolidated Balances Dr (Cr) $900 0 (R) $ 0 27,000 0 (R) 0 - 11,250 (R) 0 0 112,500 - 0 (E) 0 0 (R) Customer contracts Brand names - Goodwill - 2 2 2 2 2 2 (R) 0 0 (R) 0 0 (R) 0 0 (R) 0 0 (R) 0 0 (R) 0 0 Current liabilities (180,000) (1,800) 0 Long-term liabilities (337,500) (22,500) 0 (R) 0 Capital stock (78,750) Retained earnings (123,750) (18,000) (E) 3,150 0 0 0 (E) 0 Total $0 $0 $ 0 $ 0 $ 0 c. Prepare the consolidated balance sheet at the date of acquisition, in good form. (all amounts in thousands) Brightcove, Inc. and Subsidiary Consolidated Balance Sheet Date of Acquisition Assets Liabilities Current assets $ 0 Current liabilities $ 0 Plant and equipment, net 0 Long-term liabilities 0 Licenses and trademarks 0 Total liabilities 0 Other identifiable intangible assets Goodwill 0 0 Stockholders equity Capital stock 0 Total assets $ LA Retained earnings Total equity 0 Total liabilities and equity $ 0