Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/21 Current assets Copyrights Royalty agreements Investment in Stanza. Liabilities Common stock Additional paid-in capital Penske $ (812,000) 289,200 223,000 Not given 80,000 (708,000) 448,000 978,000 626,000 Stanza $ (680,000) 170,000 204,000 0 60,000 (270,000) 632,000 378,500 1,048,000 Not given (506,000) 0 (1,262,500) (600,000) ($20 par) (150,000) (200,000) ($10 par) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2021, Penske acquired all of Stanza's outstanding stock for $762,000 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 $466,000 book value but a fair value of $622,000. 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? a. Consolidated copyrights b. Consolidated net income C Consolidated retained earnings d. Consolidated goodwill Amounts
Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/21 Current assets Copyrights Royalty agreements Investment in Stanza. Liabilities Common stock Additional paid-in capital Penske $ (812,000) 289,200 223,000 Not given 80,000 (708,000) 448,000 978,000 626,000 Stanza $ (680,000) 170,000 204,000 0 60,000 (270,000) 632,000 378,500 1,048,000 Not given (506,000) 0 (1,262,500) (600,000) ($20 par) (150,000) (200,000) ($10 par) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2021, Penske acquired all of Stanza's outstanding stock for $762,000 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 $466,000 book value but a fair value of $622,000. 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? a. Consolidated copyrights b. Consolidated net income C Consolidated retained earnings d. Consolidated goodwill Amounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Revenues
Cost of goods sold
Depreciation expense
Investment income
Dividends declared
Retained earnings, 1/1/21
Current assets
Copyrights
Royalty agreements
Investment in Stanza
Liabilities
Penske
$ (812,000)
289,200
223,000
Not given
80,000
(708,000)
448,000
978,000
626,000
Common stock
Additional paid-in capital
Note: Parentheses indicate a credit balance.
Not given
(506,000)
(600,000) ($20 par)
(150,000)
a.
b.
Consolidated copyrights
Consolidated net income
C Consolidated retained earnings
d.
Consolidated goodwill
Stanza
$ (680,000)
170,000
204,000
0
60,000
(270,000)
632,000
378,500
1,048,000
Amounts
0
On January 1, 2021, Penske acquired all of Stanza's outstanding stock for $762,000 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 $466,000 book value
but a fair value of $622,000.
(1,262,500)
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?
(200,000) ($10 par)
(80,000)
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