The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021:

	Penske					Stanza
Revenues	$	(834,000	)			$	(500,000	)
Cost of goods sold		296,900					125,000
Depreciation expense		235,000					344,000
Investment income		Not given					0
Dividends declared		80,000					60,000
Retained earnings, 1/1/21		(746,000	)				(314,000	)
Current assets		594,000					688,000
Copyrights		1,074,000					436,000
Royalty agreements		644,000					1,188,000
Investment in Stanza		Not given					0
Liabilities		(544,000	)				(1,747,000	)
Common stock		(600,000	)	($20 par)			(200,000	)	($10 par)
Additional paid-in capital		(150,000	)				(80,000	)

Parentheses indicate a credit balance.

On January 1, 2021, Penske acquired all of Stanza’s outstanding stock for $816,000 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 $516,000 book value but a fair value of $600,000.

1. As of December 31, 2021, what is the consolidated copyrights balance?

2. For the year ending December 31, 2021, what is consolidated net income?

3. As of December 31, 2021, what is the consolidated retained earnings balance?

4. As of December 31, 2021, what is the consolidated balance to be reported for goodwill?

5. 
   

 

Transcribed Image Text:

Amounts а. Consolidated copyrights b. Consolidated net income С. Consolidated retained earnings d. Consolidated goodwill Amounts а. Consolidated copyrights b. Consolidated net income С. Consolidated retained earnings d. Consolidated goodwill

Answer rating: 100% (QA)

Consolidated copyright balance as of December 2021 Fair value of copyright 600000 Less Book value of ... View the full answer