On January 1, 2018 Casey Corporation exchanged $3,300,000 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:
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records.
Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.
Extracted text: Fair value of Kennedy (consideration transferred). Carrying amount acquired.. Excess fair value ....... to buildings (undervalued)... to licensing agreements (overvalued) to goodwill (indefinite life) .. $3,300,000 2,600,000 $ 700,000 $ 382,000 274,000 (108,000) $ 426,000
Extracted text: Accounts Casey Kennedy $ 172,500 347,000 263,500 Cash 457,000 1,655,000 1,310,000 3,300,000 6,315,000 -0- Accounts receivable. Inventory.. Investment in Kennedy Buildings (net) .... Licensing agreements Goodwill .. -0- 2,090,000 3,070,000 -0- 347,000 $ 13,384,000 $ (394,000) (3,990,000) (3,000,000) $ 5,943,000 $ (393,000) (2,950,000) (1,000,000) (500,000) (1,100,000) $ (5,943,000) Total assets . Accounts payable . Long-term debt . Common stock Additional paid-in capital. Retained earnings..... Total liabilities and equities.. (6,000,000) $ (13,384,000)