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On January 1, 2021, Casey Corporation exchanged $3,293,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy
On January 1, 2021, Casey Corporation exchanged $3,293,000 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 falr-value allocation schedule: Fair value of Kennedy (consideration transferred) $ 3,293,880 Carrying amount acquired 2,680,880 Excess fair value 693,880 to buildings (undervalued) 355, eee to licensing agreements (overvalued) (160,880) 195,888 to goodwill (indefinite life) 498,000 $ $ $ 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 $ 452,600 $ 174,750 1,680, eee 326,000 1,305,000 188,250 3,293,000 5,872,500 1,890,000 3,730,000 731,500 $ 13,334,000 $ 6,309,000 $ (364, 000) $ (419,000) (3,970, 000) (3,290,000) (3, eee, 600) (1,000,000) (500,000) (6, eee, 800) (1,100,000) $ (13,334,690) $ (6,309,000) 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 deblt 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.) 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.) Consolidated CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Worksheet for a Consolidated Balance Sheet January 1, 2021 Adjust. & Elim. Casey Kennedy Debit Credit Cash $ 452,000 S 174,750 Accounts receivable 1.680,000 326,000 Inventory 1,305,000 188,250 Investment in Kennedy 3.293,000 Buildings (net) 5,872 500 1,890,000 Licensing agreements 3,730,000 Goodwill 731,500 Total assets $ 13,334,000 $ 6,309,000 Accounts payable S (364,000) (419,000) Long-term debt (3,970,000) (3,290,000) Common stock (3,000,000) (1,000,000) Additional paid-in capital (500,000) Retained earnings (6,000,000) (1,100,000) Total liabilities and equities $(13,334,000) S (6,309,000) $ 0 S 0 0 S 0
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