On January 1, 2018 Casey Corporation exchanged $3,262,000 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) | $ | 3,262,000 | |||||
Carrying amount acquired | 2,600,000 | ||||||
Excess fair value | $ | 662,000 | |||||
to buildings (undervalued) | $ | 384,000 | |||||
to licensing agreements (overvalued) | (199,000 | ) | 185,000 | ||||
to goodwill (indefinite life) | $ | 477,000 | |||||
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records.
Accounts | Casey | Kennedy | |||||
Cash | $ | 423,000 | $ | 139,500 | |||
Accounts receivable | 1,515,000 | 305,000 | |||||
Inventory | 1,655,000 | 230,500 | |||||
Investment in Kennedy | 3,262,000 | 0 | |||||
Buildings (net) | 5,820,000 | 2,280,000 | |||||
Licensing agreements | 0 | 2,720,000 | |||||
Goodwill | 361,000 | 0 | |||||
Total assets | $ | 13,036,000 | $ | 5,675,000 | |||
Accounts payable | $ | (336,000 | ) | $ | (435,000 | ) | |
Long-term debt | (3,700,000 | ) | (2,640,000 | ) | |||
Common stock | (3,000,000 | ) | (1,000,000 | ) | |||
Additional paid-in capital | 0 | (500,000 | ) | ||||
Retained earnings | (6,000,000 | ) | (1,100,000 | ) | |||
Total liabilities and equities | $ | (13,036,000 | ) | $ | (5,675,000 | ) | |
Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. (Negative amounts should be indicated by a minus sign.)
On January 1, 2018 Casey Corporation exchanged $3,262,000 cash for 100 percent of the outstanding voting...
On January 1, 2018 Casey Corporation exchanged $3,209,000 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) $ 3,209,000 Carrying amount acquired 2,600,000 Excess fair value $ 609,000 to buildings (undervalued) $ 326,000 to licensing agreements (overvalued) (198,000 ) 128,000 to goodwill...
On January 1, 2018 Casey Corporation exchanged $3,209,000 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) $ 3,209,000 Carrying amount acquired 2,600,000 Excess fair value $ 609,000 to buildings (undervalued) $ 326,000 to licensing agreements (overvalued) (198,000 ) 128,000 to goodwill...
On January 1, 2018 Casey Corporation exchanged $3,244,000 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) $ 3,244,000 Carrying amount acquired 2,600,000 Excess fair value $ 644,000 to buildings (undervalued) $ 366,000 to licensing agreements (overvalued) (196,000 ) 170,000 to goodwill...
On January 1, 2018 Casey Corporation exchanged $3,218,000 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) $ 3,218,000 Carrying amount acquired 2,600,000 Excess fair value $ 618,000 to buildings (undervalued) $ 326,000 to licensing agreements (overvalued) (171,000 ) 155,000 to goodwill...
On January 1, 2018 Casey Corporation exchanged $3,252,000 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) $ 3,252,000 Carrying amount acquired 2,600,000 Excess fair value $ 652,000 to buildings (undervalued) $ 331,000 to licensing agreements (overvalued) (152,000 ) 179,000 to goodwill...
On January 1, 2021, 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: $ 3,300,000 2,600,000 $ 700,000 Fair value of Kennedy (consideration transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) $ 382,000 108,000)...
On January 1, 2018 Casey Corporation exchanged $3,205,000 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) $ 3,205,000 2,600,000 $ 605,000 $ 323,000 (191,000)...
On January 1, 2018 Casey Corporation exchanged $3,251,000 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 3,251,000 2,600,000 $ 651,000 to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) 322,000 141,000 181,000 $...
On January 1, 2021, Casey Corporation exchanged $3,213,000 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) $ $ 3,213,000 2,600,000 $ 613,000 344,000 (149,000)...
On January 1, 2018 Casey Corporation exchanged $3,218,000 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) $3,218,000 Carrying amount acquired $2,600,000 Excess fair value $618,000 To buildings (undervalued) $360,000 To licensing agreements (overvalued) (162,000) 198,000 To goodwill (indefinite...