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The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021: Penske Stanza Revenues $ (832,000) $ (424,000) Cost

The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021:

Penske Stanza
Revenues $ (832,000) $ (424,000)
Cost of goods sold 296,200 106,000
Depreciation expense 227,000 390,000
Investment income Not given 0
Dividends declared 80,000 60,000
Retained earnings, 1/1/21 (614,000) (326,000)
Current assets 570,000 698,000
Copyrights 920,000 501,000
Royalty agreements 626,000 1,160,000
Investment in Stanza Not given 0
Liabilities (606,000) (1,885,000)
Common stock (600,000) ($20 par) (200,000) ($10 par)
Additional paid-in capital (150,000 ) (80,000 )

Note: Parentheses indicate a credit balance.

On January 1, 2021, Penske acquired all of Stanzas outstanding stock for $874,000 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 $598,000 book value but a fair value of $700,000.

  1. As of December 31, 2021, what is the consolidated copyrights balance?

  2. For the year ending December 31, 2021, what is consolidated net income?

  3. As of December 31, 2021, what is the consolidated retained earnings balance?

  4. As of December 31, 2021, what is the consolidated balance to be reported for goodwill?

image text in transcribed

Amounts a. Consolidated copyrights $ 1,506,000 b. Consolidated net income c. Consolidated retained earnings Consolidated goodwill d. $ 166,000

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