The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2024: Accounts Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/24 Current assets Copyrights Royalty agreements Penske $ (742,000) 264,700 187,000 Not given. 80,000 (788,000) 498,000 990,000 Investment in Stanza Liabilities Common stock Additional paid-in capital 772,000 Not given (600,000) (600,000) ($20 par) (150,000) Stanza $ (652,000) 163,000 224,000 0 60,000 (330,000) 598,000 384,000 1,190,000 0 (1,357,088) (200,000) ($10 par) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2024, 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. Required: a. As of December 31, 2024, what is the consolidated copyrights balance? b. For the year ending December 31, 2024, what is consolidated net income? c. As of December 31, 2024, what is the consolidated retained earnings balance? d. As of December 31, 2024, 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 $ 1,194,000
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2024: Accounts Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/24 Current assets Copyrights Royalty agreements Penske $ (742,000) 264,700 187,000 Not given. 80,000 (788,000) 498,000 990,000 Investment in Stanza Liabilities Common stock Additional paid-in capital 772,000 Not given (600,000) (600,000) ($20 par) (150,000) Stanza $ (652,000) 163,000 224,000 0 60,000 (330,000) 598,000 384,000 1,190,000 0 (1,357,088) (200,000) ($10 par) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2024, 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. Required: a. As of December 31, 2024, what is the consolidated copyrights balance? b. For the year ending December 31, 2024, what is consolidated net income? c. As of December 31, 2024, what is the consolidated retained earnings balance? d. As of December 31, 2024, 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 $ 1,194,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2024:
Accounts
Revenues
Cost of goods sold
Depreciation expense
Investment income
Dividends declared
Retained earnings, 1/1/24
Current assets
Copyrights
Royalty agreements
Penske
$ (742,000)
264,700
187,000
Not given.
80,000
(788,000)
498,000
990,000
Investment in Stanza
Liabilities
Common stock
Additional paid-in capital
772,000
Not given
(600,000)
(600,000) ($20 par)
(150,000)
Stanza
$ (652,000)
163,000
224,000
0
60,000
(330,000)
598,000
384,000
1,190,000
0
(1,357,088)
(200,000) ($10 par)
(80,000)
Note: Parentheses indicate a credit balance.
On January 1, 2024, 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.
Required:
a. As of December 31, 2024, what is the consolidated copyrights balance?
b. For the year ending December 31, 2024, what is consolidated net income?
c. As of December 31, 2024, what is the consolidated retained earnings balance?
d. As of December 31, 2024, 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
$
1,194,000
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