Chapter 3, Problem 23P

Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:

	Penske	Stanza
Revenues...........................	$(700,000)	$(400,000)
Cost of goods sold...................	250,000	100,000
Depreciation expense................	150,000	200,000
Investment income...................	Not given	-0-
Dividends declared...................	80,000	60,000
Retained earnings, 1/1/18.............	(600,000)	(200,000)
Current assets.......................	400,000	500,000
Copyrights..........................	900,000	400,000
Royalty agreements..................	600,000	1,000,000
Investment in Stanza.................	Not given	-0-
Liabilities............................	(500,000)	(1,380,000)
Common stock......................	(600,000) ($20 par)	(200,000) ($10 par)
Additional paid-in capital..............	(150,000)	(80,000)

On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $680,000 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 $440,000 book value but a fair value of $560,000.

a. As of December 31, 2018, what is the consolidated copyrights balance?

b. For the year ending December 31, 2018, what is consolidated net income?

c. As of December 31, 2018, what is the consolidated retained earnings balance?

d. As of December 31, 2018, what is the consolidated balance to be reported for goodwill?