Required: Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. Note: 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.
Required: Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. Note: 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Problem 2-28 (Algo) (LO 2-4, 2-7)
On January 1, 2024, Casey Corporation exchanged $3,327,000 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)
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 (credit balances in parentheses).
Accounts
Additional paid-in capital
Retained earnings
Total liabilities and equities
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
$
$
$ 456,000
1,450,000
1,335,000
3,327,000
6,060,000
Casey
259,000
$ 12,887,000
$ (377,000)
(3,510,000)
(3,000,000)
Required:
Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.
Note: 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.
456,000 $
8
$ 6,522,000
$ (462,000)
(3,460,000)
(1,000,000)
(500,000)
(6,000,000)
(1,100,000)
$ (12,887,000) $ (6,522,000)
1,450,000
1,335,000
3,327,000
6,060,000
259,000
12,887,000 $
(377,000) S
(3,510,000)
(3,000,000)
$ 351,000
(104,000)
8
CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY
Worksheet for a Consolidated Balance Sheet
January 1, 2024
(6,000,000)
$ (12,887,000)
Kennedy
$ 136,500
321,000
884,500
Kennedy
2,150,000
3,030,000
$ 3,327,000
2,600,000
$ 727,000
136,500
321,000
884,500
247,000
$ 480,000
2,150,000
3,030,000
6,522,000
(462,000)
(3,460,000)
(1,000,000)
(500,000)
.100,000)
$ (6.522,000) $
Adjustment and Elimination
Credit
Debit
0 $
Consolidated
$
0 $
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education