On January 1, 2021, Casey Corporation exchanged $3,300,000 cash for 100 percent of the outstanding voting stock
Question:
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:
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses).
Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.
$3,300,000 Fair value of Kennedy (consideration transferred) Carrying amount acquired 2,600,000 Excess fair value.. $ 700,000 to buildings (undervalued) to licensing agreements (overvalued) $ 382,000 (108,000) 274,000 to goodwill (indefinite life) . $ 426,000
Step by Step Answer:
CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Worksheet for a Consolidated Bal...View the full answer
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Related Video
This video explains the basic understanding of a group. The term control is acquired when a parent company acquires more than 50% voting rights of subsidiaries. We have covered the basic structure of the consolidated balance sheet, with multiple scenarios of 100% and partial acquisitions at the start and during an accounting period. Also, goodwill and Non-controlling interest are covered in detail
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