On January 1, 2021, 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) | $ | 3,251,000 | |||
Carrying amount acquired | 2,600,000 | ||||
Excess fair value | $ | 651,000 | |||
to buildings (undervalued) | $ | 322,000 | |||
to licensing agreements (overvalued) | (141,000 | ) | 181,000 | ||
to goodwill (indefinite life) | $ | 470,000 | |||
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses).
Accounts | Casey | Kennedy | |||||
Cash | $ | 493,000 | $ | 171,000 | |||
Accounts receivable | 1,650,000 | 348,000 | |||||
Inventory | 1,620,000 | 140,000 | |||||
Investment in Kennedy | 3,251,000 | 0 | |||||
Buildings (net) | 6,067,500 | 2,830,000 | |||||
Licensing agreements | 0 | 3,080,000 | |||||
Goodwill | 244,500 | 0 | |||||
Total assets | $ | 13,326,000 | $ | 6,569,000 | |||
Accounts payable | $ | (386,000 | ) | $ | (429,000 | ) | |
Long-term debt | (3,940,000 | ) | (3,540,000 | ) | |||
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 | $ | (13,326,000 | ) | $ | (6,569,000 | ) | |
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 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.)
On January 1, 2021, Casey Corporation exchanged $3,251,000 cash for 100 percent of the outstanding voting...
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, 2021, Casey Corporation exchanged $3,271,000 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) $ 3,271,000 Carrying amount acquired 2,600,000 Excess fair value $ 671,000 to buildings (undervalued) $ 378,000 to licensing agreements (overvalued) (188,000 ) 190,000 to goodwill...
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 $3,194,000 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, 194,000 2,600,000 594,000 368,000 (182,000)...
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, 2021, Casey Corporation exchanged 53 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) $ 3,213,000 Carrying amount acquired 2,600,000 Excess fair value $ 613,000 to buildings (undervalued) $ 343,000 to licensing agreenente (overvalued) (144,000 199,000 to goodwill indefinite life)...
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, 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) $360,000 To licensing agreements (overvalued) (162,000) 198,000 To goodwill (indefinite...
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...