What is the consolidated copyrights balance

Assignment Help Accounting Basics

Reference no: EM132818482

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

	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, 1/1/21	(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, 2021, Penske acquired all of Stanza's 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.

Required -

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

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

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

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

Reference no: EM132818482

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