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:

Fair value of Kennedy $($consideration transferred$)$ $ $3,300,000$

Carrying amount acquired $2,600,000$

Excess fair value $ $700,000$

to buildings $($undervalued$)$ $ $382,000$

to licensing agreements $($overvalued$)(108,000)274,000$

to goodwill $($indefinite life$)$ $ $426,000$

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 $ $457,000$ $ $172,500$

Accounts receivable $1,655,000347,000$

Inventory $1,310,000263,500$

Investment in Kennedy $3,300,0000$

Buildings $($net$)6,315,0002,090,000$

Licensing agreements $03,070,000$

Goodwill $347,0000$

Total assets $ $13,384,000$ $ $5,943,000$

Accounts payable $ $(394,000)$ $ $(393,000)$

Long$-$term debt $(3,990,000)(2,950,000)$

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 $ $(13,384,000)$ $ $(5,943,000)$

Prepare an acquisition$-$date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.

CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNEDY

Worksheet for a Consolidated Balance Sheet

January $1,2021$

Adjust. & Elim.

Casey Kennedy Debit Credit Consolidated

Cash $$457,000$ $$172,500$

Accounts receivable $1,655,000347,000$

Inventory $1,310,000263,500$

Investment in Kennedy $3,300,000$

Buildings $($net$)6,315,0002,090,000$

Licensing agreements $3,070,000$

Goodwill $347,000$

Total assets $$13,384,000$ $$5,943,000$ $$0$

Accounts payable $$(394,000)(393,000)$

Long$-$term debt $(3,990,000)(2,950,000)$

Common stock $(3,000,000)(1,000,000)$

Additional paid$-$in capital $(500,000)$

Retained earnings $(6,000,000)(1,100,000)$

Total liabilities and equities $$(13,384,000)$ $$(5,943,000)$ $$0$ $$0$ $$0$