Reference no: EM132447318

Question - Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:

Values below are for Penske and Stanza, respectively:

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

Retained earnings, 1/1/18: (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)

Note: Parentheses indicate a credit balance.

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.

1. As of December 31, 2018, what is the consolidated copyrights balance?

2. For the year ending December 31, 2018, what is consolidated net income?

3. As of December 31, 2018, what is the consolidated retained earnings balance?

4. As of December 31, 2018, what is the consolidated balance to be reported for goodwill?