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On January 1, 2018 Casey Corporation exchanged $3,298,000 cash for 100 percent of the outstanding voting...

On January 1, 2018 Casey Corporation exchanged $3,298,000 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) $ 3,298,000
Carrying amount acquired 2,600,000
Excess fair value $ 698,000
to buildings (undervalued) $ 329,000
to licensing agreements (overvalued) (106,000 ) 223,000
to goodwill (indefinite life) $ 475,000

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

Accounts Casey Kennedy
Cash $ 447,000 $ 179,250
Accounts receivable 1,335,000 344,000
Inventory 1,270,000 217,750
Investment in Kennedy 3,298,000 0
Buildings (net) 6,142,500 2,790,000
Licensing agreements 0 2,280,000
Goodwill 321,500 0
Total assets $ 12,814,000 $ 5,811,000
Accounts payable $ (304,000 ) $ (421,000 )
Long-term debt (3,510,000 ) (2,790,000 )
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 $ (12,814,000 ) $ (5,811,000 )

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 KENNEDYConsolidated Balance SheetJanuary 1, 2018AssetsLiabilities and Stockholders' EquityTotal assets$0Total liabilities and equities$0

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