Business, 18.02.2021 21:50 dedrell16

On January 1, 2018 Casey Corporation exchanged $3,252,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) $ 3,252,000 Carrying amount acquired 2,600,000 Excess fair value $ 652,000 to buildings (undervalued) $ 331,000 to licensing agreements (overvalued) (152,000 ) 179,000 to goodwill (indefinite life) $ 473,000 Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records. Accounts Casey Kennedy Cash $ 500,000 $ 155,250 Accounts receivable 1,430,000 322,000 Inventory 1,415,000 214,750 Investment in Kennedy 3,252,000 0 Buildings (net) 5,902,500 2,340,000 Licensing agreements 0 2,830,000 Goodwill 291,500 0 Total assets $ 12,791,000 $ 5,862,000 Accounts payable $ (311,000 ) $ (462,000 ) Long-term debt (3,480,000 ) (2,800,000 ) Common stock (3,000,000 ) (1,000,000 ) Additional paid-in capital 0 (500,000 ) Retained earnings (6,000,000 ) (1,100,000 ) Total liabilities and equities $ (12,791,000 ) $ (5,862,000 ) Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.

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