90.2K

Verified Solution

Link Copied!

Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:

	Penske					Stanza
Revenues	$	(796,000	)			$	(520,000	)
Cost of goods sold		283,600					130,000
Depreciation expense		156,000					270,000
Investment income		Not given					0
Dividends declared		80,000					60,000
Retained earnings, 1/1/18		(776,000	)				(376,000	)
Current assets		496,000					576,000
Copyrights		946,000					412,500
Royalty agreements		762,000					1,180,000
Investment in Stanza		Not given					0
Liabilities		(500,000	)				(1,452,500	)
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 $919,000 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 $480,000 book value but a fair value of $672,000.

As of December 31, 2018, what is the consolidated copyrights balance?

For the year ending December 31, 2018, what is consolidated net income?

As of December 31, 2018, what is the consolidated retained earnings balance?

As of December 31, 2018, what is the consolidated balance to be reported for goodwill?

Answer & Explanation Solved by verified expert

See Answer