Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. (Negativeamounts should be indicated by a minus sign.)CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDYConsolidated Balance SheetJanuary 1, 2018Total assetsAssetsLiabilities and Stockholders' EquityTotal liabilities and equities On January 1, 2018 Casey Corporation exchanged $3,210,000 cash for 100 percent of the outstanding voting stock of KennedyCorporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting informationsystems.At the acquisition date, Casey prepared the following fair-value allocation schedule:Fair value of Kennedy (consideration transferred)Carrying amount acquiredExcess fair valueto buildings (undervalued)to licensing agreements (overvalued)to goodwill (indefinite life)AccountsCashAccounts receivableInventoryInvestment in KennedyBuildings (net)Licensing agreementsGoodwillTotal assetsAccounts payableLong-term debtCommon stockImmediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from theirseparate financial records.Additional paid-in capitalRetained earningsTotal liabilities and equities$Casey480,0001,420,0001,490,0003,210,0005,992,5000$ 393,000(193,000)(3,470,000)(3,000,000)$ 3,210,0002,600,000610,000Kennedy0$200,000$ 410,000166,500295,000126,5000249,500$ 12,842,000 $ 6,608,000$(372,000) $2,580,0003,440,0000(438,000)(3,570,000)(1,000,000)(500,000)(6,000,000)(1,100,000)$ (12,842,000) $ (6,608,000)

Consolidated Balance sheet: Consolidated balance sheet refers to the balance sheet prepared from the…

Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. ( amounts should be indicated by a minus sign.) CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Consolidated Balance Sheet January 1, 2018 Assets Liabilities and Stockholders' Equity

Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. ( amounts should be indicated by a minus sign.) CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Consolidated Balance Sheet January 1, 2018 Assets Liabilities and Stockholders' Equity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. (Negative
amounts should be indicated by a minus sign.)
CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY
Consolidated Balance Sheet
January 1, 2018
Total assets
Assets
Liabilities and Stockholders' Equity
Total liabilities and equities

On January 1, 2018 Casey Corporation exchanged $3,210,000 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)
Accounts
Cash
Accounts receivable
Inventory
Investment in Kennedy
Buildings (net)
Licensing agreements
Goodwill
Total assets
Accounts payable
Long-term debt
Common stock
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their
separate financial records.
Additional paid-in capital
Retained earnings
Total liabilities and equities
$
Casey
480,000
1,420,000
1,490,000
3,210,000
5,992,500
0
$ 393,000
(193,000)
(3,470,000)
(3,000,000)
$ 3,210,000
2,600,000
610,000
Kennedy
0
$
200,000
$ 410,000
166,500
295,000
126,500
0
249,500
$ 12,842,000 $ 6,608,000
$
(372,000) $
2,580,000
3,440,000
0
(438,000)
(3,570,000)
(1,000,000)
(500,000)
(6,000,000)
(1,100,000)
$ (12,842,000) $ (6,608,000)

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