Check my work Following are selected account balances from Penske Company and St
ID: 2333231 • Letter: C
Question
Check my work Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Pensk Stanza $ (568,000) Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/18 Cuzrent assets Copyrights Royalty agreements Investment in Stanza Liabilities Common stock Additional paid-in capital $ (842,000) 299,700 207,000 Not given 80,000 142,000 304,000 60,000 (222,000) 566,000 449,500 (668,000) 572,000 1,076,000 604,000 Not given (546,000) 1,180,000 (1,631,500) (600, 000) ($20 par) 200,000) ($10 par) (150, 000) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2018, Penske acquired all of Stanza's outstanding stock for $755,000 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 $526,000 book value but a fair value of $724,000. 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? KPrey 3 of 13NextExplanation / Answer
(A) As of December 31, 2018, balance of consolidated copyrights = $1076000+$449500= $15,25,500
(B) Consolidated net income as of December 31 2018=
Consolidated Revenues- consolidated expenses(inculding depreciation expense) =
$(842000+568000) - $(299700+142000+207000+304000)
=$1410000-$952700=$457300
(C) Retained Earnings Balance as of December 31, 2018
= consolidated Retained Earnings- consolidated Dividend declared
=$(668000+222000) + $(80000+60000)
= $890000- $140000 = $750000
D) Consolidated balance to be reported for Goodwill as of December 31st, 2018
= Acquisition cost-(Assets of stanza - liabilities of stanza)
=$755000- $(566000+449500+1180000-1631500)
=$755000- $564000
= $191000