FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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?
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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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