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. Cash paid to GP shareholders $2,500 Cash paid to consultants and lawyers 600 Fair value of new IA stock issued, 1,000 shares, $1 par 18,000 Stock registration fees, paid in cash 450 Fair value of earnings contingency 125The 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:

	International Auto	Genuine Parts
(in thousands)	Book Value Dr (Cr)	Book Value Dr (Cr)	Fair Value Dr (Cr)
Current assets	$15,000	$500	$600
Fixed assets, net	210,000	13,500	10,000
Trademarks	44,500	1,700	3,000
Current liabilities	(12,500)	(200)	(200)
Long-term liabilities	(175,000)	(13,000)	(12,500)
Common stock, par value	(4,000)	(250)
Additional paid-in capital	(55,000)	(4,250)
Retained earnings	(22,500)	1,000
Accumulated other comprehensive income	(2,000)	700
Treasury stock	1,500	300
Total	$0	$0

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 value
Licensing agreements	$1,200
Skilled workforce	7,500
Order backlogs	2,500
Future synergies between IA and GP supply chains	800

a. Prepare a schedule calculating the excess of acquisition cost over GPs 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 cost		Answer
GP book value		Answer
Excess of acquisition cost over book value		Answer
Excess of fair value over book value:
Current assets	Answer
Fixed assets, net	Answer
Trademarks	Answer
AnswerRetained earningsSkilled workforceFuture synergies between supply chainsLicensing agreementsAccumulated other comprehensive income	Answer
AnswerRetained earningsSkilled workforceOrder backlogsFuture synergies between supply chainsAccumulated other comprehensive income	Answer
Long-term liabilities	Answer	Answer
Goodwill		Answer

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

• Use negative signs with your credit balance answers in the Dr (Cr) columns.
• Enter answers in thousands.

Consolidation Working Paper
	Accounts Taken From Books	Eliminations
(in thousands)	International Auto Dr (Cr)	Genuine Parts Dr (Cr)		Debit	Credit		Consolidated Balances Dr (Cr)
Current assets	Answer	Answer	(R)	Answer			Answer
Fixed assets, net	Answer	Answer			Answer	(R)	Answer
Investment in GP	Answer	--			Answer	(E)	Answer
					Answer	(R)	--
Trademarks	Answer	Answer	(R)	Answer			Answer
AnswerRetained earningsSkilled workforceFuture synergies between supply chainsLicensing agreementsAccumulated other comprehensive income	--	--	(R)	Answer			Answer
AnswerRetained earningsSkilled workforceOrder backlogsFuture synergies between supply chainsAccumulated other comprehensive income			(R)	Answer			Answer
Goodwill	--	--	(R)	Answer			Answer
Current liabilities	Answer	Answer					Answer
Long-term liabilities	Answer	Answer	(R)	Answer			Answer
Common stock, par	Answer	Answer	(E)	Answer			Answer
Additional paid-in capital	Answer	Answer	(E)	Answer			Answer
Retained earnings	Answer	Answer			Answer	(E)	Answer
AOCI	Answer	Answer			Answer	(E)	Answer
Treasury stock	Answer	Answer			Answer	(E)	Answer
Total	Answer	Answer		Answer	Answer		Answer

c. Prepare the consolidated balance sheet at the date of acquisition.

• Do not use negative signswith any of your answers below.
• Enter answers in thousands.

International Auto and Subsidiary Consolidated Balance Sheet Date of Acquisition
Assets		Liabilities
Current assets	Answer	Current liabilities	Answer
Fixed assets, net	Answer	Long-term liabilities	Answer
Trademarks	Answer	Total liabilities	Answer
Other identifiable intangible assets	Answer
Goodwill	Answer	Shareholders' Equity
		Common stock, par	Answer
		Additional paid-in capital	Answer
		Retained earnings	Answer
		Accumulated other comprehensive income	Answer
		Treasury stock	Answer
		Total shareholders' equity	Answer
Total assets	Answer	Total liabilities and equity	Answer

Please answer all parts of the question.