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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 Investment in Stanza Liabilities Common stock Additional paid-in capital Penske $ (834,000) 296,900 235,000 Not given 80,000 (746,000) 594,000 1,074,000 644,000 Not given (544,000) (600,000) ($20 par) (150,000) Stanza $ (500,000) 125,000 344,000 0 60,000 (314,000) 688,000 436,000 1,188,000 0 (1,747,000) (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 $816,000 fair value in cash and common stock. Penske a paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $516,000 book va but a fair value of $600,000. 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?

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 Investment in Stanza Liabilities Common stock Additional paid-in capital Penske $ (834,000) 296,900 235,000 Not given 80,000 (746,000) 594,000 1,074,000 644,000 Not given (544,000) (600,000) ($20 par) (150,000) Stanza $ (500,000) 125,000 344,000 0 60,000 (314,000) 688,000 436,000 1,188,000 0 (1,747,000) (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 $816,000 fair value in cash and common stock. Penske a paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $516,000 book va but a fair value of $600,000. 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?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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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 Investment in Stanza Liabilities Common stock Additional paid-in capital Penske $ (834,000) 296,900 235,000 Not given 80,000 (746,000) 594,000 1,074,000 644,000 Not given (544,000) (600,000) ($20 par) (150,000) Stanza $ (500,000) 125,000 344,000 0 60,000 (314,000) 688,000 436,000 1,188,000 0 (1,747,000) (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 $816,000 fair value in cash and common stock. Penske a paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $516,000 book va but a fair value of $600,000. 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?
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 Investment in Stanza Liabilities Common stock Additional paid-in capital Penske $ (834,000) 296,900 235,000 Not given 80,000 (746,000) 594,000 1,074,000 644,000 Not given (544,000) (600,000) ($20 par) (150,000) Stanza $ (500,000) 125,000 344,000 0 60,000 (314,000) 688,000 436,000 1,188,000 0 (1,747,000) (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 $816,000 fair value in cash and common stock. Penske a paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $516,000 book va but a fair value of $600,000. 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?
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