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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

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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) $ 3,282,000 2,600,000 $ 682,000 $ 353,000 (128,000) 225,000 457,000 $ Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition 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 $ 441,000 174,000 1,255,000 323,000 1,270,000 992,000 3,282,000 0 5,587,500 1,880,000 0 3,010,000 963,500 0 $ 12,799,000 $ 6,379,000 $ (329,000) $ (399,000) (3, 470,000) (3,380,000) (3,000,000) (1,000,000) 0 (500,000) (6,000,000) (1,100,000) $ (12,799,000) $ (6,379,000) 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 $ 441,000 $ 174,000 $ 615,000 Accounts receivable 1,255,000 323,000 1,578,000 Inventory 1,270,000 992,000 2,262,000 Investment in Kennedy 3,282,000 0 Buildings (net) 5,587,500 1,880,000 7.820,500 Licensing agreements 3,010,000 2,882,000 Goodwill 963,500 1,420,500 Total assets $ 12,799,000 $ 6,379,000 $ 16,578,000 Accounts payable $ (329,000) (399,000) 728,000 Long-term debt (3,470,000) (3,380,000) 6,850,000 Common stock (3,000,000) (1,000,000) 3,000,000 Additional pald.in capital (500,000) Retained earnings (6,000,000) (1,100,000) 6,000,000 Total liabilities and equities $(12,799,000) $ (6,379,000) $ $ 0 $ 16,578,000 0 0

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