Question

Brightcove, Inc. acquires Ciber, Inc. for $80 million in cash and accounts for the acquisition as a merger. Ciber’s balance sheet at the date of acquisition is as follows (in thousands):

	Book Value	Fair Value
Current assets	$400	$250
Plant and equipment	12,000	5,000
Licenses and trademarks	5,000	8,000
Total assets	$17,400
Current liabilities	$800	800
Long-term liabilities	10,000	9,500
Capital stock	8,000
Retained earnings	(1,400)
Total liabilities and equity	$17,400

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:

(in thousands)	Fair Value
Customer contracts	$2,000
Assembled workforce	25,000
Brand names	3,000
Leases at rents below current market	500
Developed technology	200
In-process research and development	1,000
Future cost savings from elimination of duplicate assets	400
Additional expected revenues from bundling products	800

c. Prepare the journal entry Brightcove makes to record the acquisition.

Enter answer in thousands (hint - $80 million equals $80,000 in thousands).

$Answer (in thousands)

c. Prepare the journal entry Brightcove makes to record the acquisition.

Enter answers in thousands (hint - $80 million equals $80,000 in thousands).

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant and equipment	Answer	Answer
Licenses and trademarks	Answer	Answer
Customer contracts	Answer	Answer
Brand names	Answer	Answer
Answer Assembled workforce Future cost savings from duplicate assets Additional expected revenues Favorable leases	Answer	Answer
Answer Assembled workforce Future cost savings from duplicate assets Developed technology Additional expected revenues	Answer	Answer
Answer Assembled workforceIn-process R&D Future cost savings from duplicate assets Additional expected revenues	Answer	Answer
Goodwill	Answer	Answer
Current liabilities	Answer	Answer
Long term liabilities	Answer	Answer
Answer Cash Note payable Capital Stock Earnout liability	Answer	Answer

Answer 1

c) Journal Entry :-

Date	Particulars	Debit($)	Credit($)
	Current Assets A/c Dr.	250000
	Plant and Equipment A/c Dr.	5000000
	Licences and trade mark A/c Dr.	8000000
	Customer Contracts A/c Dr.	2000000
	Brand Names A/c Dr.	3000000
	Leases at rents below current market A/c Dr.	500000
	Developed Technology A/c Dr.	200000
	In-Process Research and Development A/c Dr.	1000000
	Goodwill A/c Dr. (Balance Figure)	70350000
	To Current Liablities A/c		800000
	To Long Term Liabilities A/c		9500000
	To Cash (Purchase Consideration) A/c		80000000
	(To Record the Acquisition)