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Consolidation with Previously Unrecorded Intangibles and Goodwill Brightcove, Inc. acquires all of the stock of Ciber, Inc, for $100 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 $140,000 $800 $600 Plant and equipment, net 400,000 24,000 8,000 Licenses and trademarks 10,000 14,000 Investment in Ciber 100,000 Current liabilities (160,000) (1,600) (1,600) Long-term liabilities (300,000) (20,000) (22,000) Capital stock (70,000) (16,000) Retained earnings (110,000) 2,800 Total $0 $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 (in thousands) Customer contracts $2,000 Assembled workforce 40,000 Brand names 10,000 Leases at rents below current market 800 Developed technology 3,000 In process research and development 600 Future cost savings from elimination of duplicate assets 1,600 Additional expected revenues from bundling products 1,200 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. $ 0 x 0 x 0 x OX 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 x 0 X OX OX 0 X 0 X 0 X * X 0 X 0 x Goodwill $ 0x 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. Use negative signs with your credit balance answers in the Consolidated Balances column. Consolidation Working Paper Accounts Taken From Books Eliminations Brightcove Ciber Consolidated Balances (in thousands) Dr (Cr) Dr (Cr) Debit Credit Dr (Cr) Current assets $ 140,000 $800 200 ~ (R) $ 140,600 Plant and equipment net 400,000 24,000 16,000 (R) 408,000 ~ Licenses and trademarks 10,000 (R) 4,000 14,000 Investment in Ciber 100,000 100,000 X (E) O 112,200 X (R) Customer contracts 0 x 0 x Brand names 0 x 0 x $ x OX 0 x 0 x Goodwill Ox 0 x 0 x Current liabilities Long-term liabilities Capital stock O X (R) 0 x (160,000) (300,000) (70,000) (110,000) $ 0 (1,600) (20,000) (16,000) (E) 2,800 $0 0 x 0 x 0 x Retained earnings Total 0 (E) 0 x $ 0 x $ $ 0 C. Prepare the consolidated balance sheet at the date of acquisition, in good form. (all amounts in thousands) $ 0 x A OX Brightcove, Inc. and Subsidiary Consolidated Balance Sheet Date of Acquisition Assets Liabilities Current assets 300 x Current liabilities Plant and equipment, net 4,000 * Long-term liabilities Licenses and trademarks 7,000 % Total liabilities Other identifiable intangible assets Goodwill 0 Stockholders equity Capital stock Retained earnings Total equity Total assets $ 11,300 Total liabilities and equity $ OX Ox 0 x 0x Consolidation with Previously Unrecorded Intangibles and Goodwill Brightcove, Inc. acquires all of the stock of Ciber, Inc, for $100 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 $140,000 $800 $600 Plant and equipment, net 400,000 24,000 8,000 Licenses and trademarks 10,000 14,000 Investment in Ciber 100,000 Current liabilities (160,000) (1,600) (1,600) Long-term liabilities (300,000) (20,000) (22,000) Capital stock (70,000) (16,000) Retained earnings (110,000) 2,800 Total $0 $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 (in thousands) Customer contracts $2,000 Assembled workforce 40,000 Brand names 10,000 Leases at rents below current market 800 Developed technology 3,000 In process research and development 600 Future cost savings from elimination of duplicate assets 1,600 Additional expected revenues from bundling products 1,200 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. $ 0 x 0 x 0 x OX 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 x 0 X OX OX 0 X 0 X 0 X * X 0 X 0 x Goodwill $ 0x 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. Use negative signs with your credit balance answers in the Consolidated Balances column. Consolidation Working Paper Accounts Taken From Books Eliminations Brightcove Ciber Consolidated Balances (in thousands) Dr (Cr) Dr (Cr) Debit Credit Dr (Cr) Current assets $ 140,000 $800 200 ~ (R) $ 140,600 Plant and equipment net 400,000 24,000 16,000 (R) 408,000 ~ Licenses and trademarks 10,000 (R) 4,000 14,000 Investment in Ciber 100,000 100,000 X (E) O 112,200 X (R) Customer contracts 0 x 0 x Brand names 0 x 0 x $ x OX 0 x 0 x Goodwill Ox 0 x 0 x Current liabilities Long-term liabilities Capital stock O X (R) 0 x (160,000) (300,000) (70,000) (110,000) $ 0 (1,600) (20,000) (16,000) (E) 2,800 $0 0 x 0 x 0 x Retained earnings Total 0 (E) 0 x $ 0 x $ $ 0 C. Prepare the consolidated balance sheet at the date of acquisition, in good form. (all amounts in thousands) $ 0 x A OX Brightcove, Inc. and Subsidiary Consolidated Balance Sheet Date of Acquisition Assets Liabilities Current assets 300 x Current liabilities Plant and equipment, net 4,000 * Long-term liabilities Licenses and trademarks 7,000 % Total liabilities Other identifiable intangible assets Goodwill 0 Stockholders equity Capital stock Retained earnings Total equity Total assets $ 11,300 Total liabilities and equity $ OX Ox 0 x 0x