Brightcove, Inc. acquires Ciber, Inc. for $80 million in cash and accounts for t

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):

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:

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).

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

Explanation / Answer

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)

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