2-28 (Algo) (LO 2-4, 2-7) On January 1, 2021, Casey Corporation exchanged $3,271,000 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) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) $ 378,000 (188,000) $ 3,271,000 2,600,000 $ 671,000 190,000 $ 481,000 Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses). Accounts Cash Accounts receivable Inventory Investment in Kennedy Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long-term debt Common stock Additional paid-in capital Retained earnings Total liabilities and equities Casey Kennedy $ 493,000 142,500 1,315,000 288,000 1,460,000 343,500 3,271,000 0 5,812,500 1,930,000 0 3,090,000 448,500 0 $ 12,800,000 $ 5,794,000 $ (380,000) $ (384,000) (3,420,000) (2,810,000) (3,000,000) 0 (6,000,000) (1,000,000) (500,000) (1,100,000) $ (12,800,000) $ (5,794,000) Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Worksheet for a Consolidated Balance Sheet January 1, 2021 Adjust. & Elim. Casey Kennedy Debit Credit Consolidated Cash $ 493,000 $ 142,500 Accounts receivable 1,315,000 288,000 Inventory Investment in Kennedy Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long-term debt Common stock Additional paid-in capital Retained earnings Total liabilities and equities 448,500 $ 12,800,000 $ 5,794,000 $ (380,000) (384,000) (3,420,000) (2,810,000) (3,000,000) (1,000,000) (500,000) (6,000,000) (1,100,000) $(12,800,000) $ (5,794,000) 1,460,000 343,500 3,271,000 5,812,500 1,930,000 3,090,000