On January 2, 2014, Placer Company acquired a 75 percent interest in Summer Company for $8,000,000 in cash. The condensed balance sheets immediately prior to the Acquisition are below:

Additional information:
1. In addition to the above cash cost, out-of-pocket merger-related costs of $300,000 were paid in cash.
2. The merger agreement includes an earnings contingency agreement to be settled in cash; its fair value is $800,000.
3. It is determined that Summer has an unreported preacquisition contingency, consisting of a liability with an estimated present value of $400,000.
4. In-process research and development owned by Summer is worth $1,500,000.
5. The fair value of the 25 percent noncontrolling interest in Summer is $2,500,000.
Required
a. Prepare the acquisition entry made by Placer on January 2,2014.
b. Prepare the working paper eliminating entries made in consolidation on January 2,2014.

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Placer Summer (in thousands) Book Value Book Value Fair Value Cash and receivables..$10,000 8,000 12,000 2,000 Inventories... Plant assets, net. .. Intangibles $ 2,000 3,000 5,000 1,000 $11,000 $1,800 2,500 4,000 0 Total assetsm $32,000 $ 2,500 5,000 500 3,000 $11,000 $2,500 4,900 Noncurrent liabilities. 8,000 5,000 13,000 Total liabilities and stockholders' equity .....$32,000