Following are selected account balances from Penske Company and Stanza Corporation as of December 31,...
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Accounting
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:
Penske
Stanza
Revenues
$
(832,000
)
$
(424,000
)
Cost of goods sold
296,200
106,000
Depreciation expense
227,000
390,000
Investment income
Not given
0
Dividends declared
80,000
60,000
Retained earnings, 1/1/18
(614,000
)
(326,000
)
Current assets
570,000
698,000
Copyrights
920,000
501,000
Royalty agreements
626,000
1,160,000
Investment in Stanza
Not given
0
Liabilities
(606,000
)
(1,885,000
)
Common stock
(600,000
)
($20 par)
(200,000
)
($10 par)
Additional paid-in capital
(150,000
)
(80,000
)
Note: Parentheses indicate a credit balance.
On January 1, 2018, Penske acquired all of Stanzas outstanding stock for $874,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $598,000 book value but a fair value of $700,000.
As of December 31, 2018, what is the consolidated balance to be reported for goodwill?
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