On January 1, 2018, Casey Corporation exchanged $3,258,000 cash for 100 percent of the outstanding voting stock

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Question:

On January 1, 2018, Casey Corporation exchanged $3,258,000 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)				$	3,258,000
Carrying amount acquired					2,600,000
Excess fair value				$	658,000
to buildings (undervalued)	$	338,000
to licensing agreements (overvalued)		(153,000	)		185,000
to goodwill (indefinite life)				$	488,000

Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records.

Accounts	Casey			Kennedy
Cash	$	485,000		$	188,250
Accounts receivable		1,640,000			308,000
Inventory		1,675,000			167,750
Investment in Kennedy		3,273,000			0
Buildings (net)		6,135,000			2,230,000
Licensing agreements		0			2,850,000
Goodwill		508,000			0
Total assets	$	13,716,000		$	5,744,000
Accounts payable	$	(306,000	)	$	(384,000	)
Long-term debt		(4,410,000	)		(2,760,000	)
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	$	(13,716,000	)	$	(5,744,000	)

Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation. (Negative amounts should be indicated by a minus sign.)

CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY Consolidated Balance Sheet January 1, 2018 Assets Liabilities and Stockholders Equity Total assets 0 Total liabilities and equities$ 0