Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 3, Problem 23P
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:
| 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 |
| (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) ($20 par) | (200,000) ($10 par) |
| Additional paid-in capital.............. | (150,000) | (80,000) |
On January 1, 2018, 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.
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
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Chapter 3 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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