70.2K

Verified Solution

Link Copied!

The following are selected account balances from Penske Company and Stanza Corporation as of December $31,2024$:

$\backslash$table$[[$Accounts$,$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, $1/1/24,(600,000),,(200,000),],[$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,$(600,000),$ par$),(200,000),($$$10$ par$)],[$Additional paid$-$in capital,$(150,000),,(80,000),]]$

Note: Parentheses indicate a credit balance.

On January $1,2024,$ 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.$

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?

Answer & Explanation Solved by verified expert

See Answer