The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021: 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 $ (742,000) 264,700 187,000 Not given 80,000 (788,000) 498,000 990,000 772,000 Not given (600,000) (600,000) ($20 par) (150,000) Common stock Additional paid-in capital Note: Parentheses indicate a credit balance. $ Stanza (652,000) 163,000 224,000 0 60,000 (330,000) 598,000 384,000 1,190,000 0 (1,357,000) (200,000) ($10 par) (80,000) On January 1, 2021, Penske acquired all of Stanza's outstanding stock for $829,000 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 $456,000 book value but a fair value of $660,000. a. As of December 31, 2021, what is the consolidated copyrights balance? . 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?
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021: 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 $ (742,000) 264,700 187,000 Not given 80,000 (788,000) 498,000 990,000 772,000 Not given (600,000) (600,000) ($20 par) (150,000) Common stock Additional paid-in capital Note: Parentheses indicate a credit balance. $ Stanza (652,000) 163,000 224,000 0 60,000 (330,000) 598,000 384,000 1,190,000 0 (1,357,000) (200,000) ($10 par) (80,000) On January 1, 2021, Penske acquired all of Stanza's outstanding stock for $829,000 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 $456,000 book value but a fair value of $660,000. a. As of December 31, 2021, what is the consolidated copyrights balance? . 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### Selected Account Balances from Penske Company and Stanza Corporation as of December 31, 2021
#### Account Balances:
| **Account** | **Penske** | **Stanza** |
|-------------|------------|------------|
| Revenues | $(742,000) | $(652,000) |
| Cost of Goods Sold | 264,700 | 163,000 |
| Depreciation Expense | 187,000 | 224,000 |
| Investment Income | Not Given | 0 |
| Dividends Declared | 80,000 | 60,000 |
| Retained Earnings, 1/1/21 | $(788,000) | $(330,000) |
| Current Assets | 498,000 | 598,000 |
| Copyrights | 990,000 | 384,000 |
| Royalty Agreements | 772,000 | 1,190,000 |
| Investment in Stanza | Not Given | 0 |
| Liabilities | $(600,000) | $(1,357,000) |
| Common Stock | $(600,000) ($20 par) | $(200,000) ($10 par) |
| Additional Paid-in Capital | (150,000) | (80,000) |
*Note: Parentheses indicate a credit balance.*
---
### Acquisition Details:
On January 1, 2021, Penske acquired all of Stanza’s outstanding stock for $829,000 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 $456,000 book value but a fair value of $660,000.
---
### Questions:
#### 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?
---
### Answers Table:
| **Line** | **Amounts** |
|----------|-------------|
| a. Consolidated copyrights | |
| b. Consolidated net income | |
| c. Consolidated retained earnings | |
| d.
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