Answer:
a)
Fair value allocation and annual amortization can be calculated as follows:
S acquisition fair value ($ 10,000 in stock issue costs) | |||
Reduce additional Paid in capital | 854,000 | ||
Book Value of subsidiary (1/1/21) stockholder's equity balances | -654,000 | ||
Fair value in excess of book value | 200,000 | ||
Remaining Life | Amortization | ||
Excess Fair Value allocated to copyrights | |||
based on fair value | 78,000 | 6 years | 13,000 |
Goodwill | 122,000 | indefinite | - |
Total | 13,000 |
Consolidated Balance can be calculated as follows:
P (Book Value) | 1,054,000 | |
S (Book Value) | 461,500 | |
Allocation (above) | 78,000 | |
Excess amortization, 2021 | - 13,000 | 65,000 |
Total | 1,580,500 |
b)
Consolidated Net Income can be calculated as follows:
Revenues (add book values) | 1,512,000 | |
Expenses: | ||
Add: Book Values | 1,065,600 | |
Excess Amortizations | 13,000 | 1,078,600 |
Consolidated Net Income | 433,400 |
c)
The Statement of retained earings actually depicts how the company's profits for the specific period
of time are divided between dividends for shareolders and retained earnings.
This can be calculated for thr Equity Method as follows:
Retained Earnings 1/1/2021 (P) | 674,000 |
Net Income 2021 (above) | 433,400 |
Dividends declared 2021 (P) | -80,000 |
Total | 1,027,400 |
d)
The Consolidated Goodwill will be $ 122,000.
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2 Problem 3-23 (Algo) (LO 3-1, 3-4) The following are selected account balances from Penske Company...
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021: $ Stanza $ (556,000) 139,000 262,000 Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/21 Current assets Copyrights Royalty agreements Investment in Stanza Liabilities Common stock Additional paid-in capital Penske (776,000) 276,600 171,000 Not given 80,000 (658,000) 510,000 1,010,000 682,000 Not given (592,000) (600,000) ($20 par) (150,000) 60,000 (394,000) 514,000 378,500 1,118,000 0 (1,241,500) (200,000) ($10 par) (80,000)...
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021: Penske Revenues $ (708,000) Cost of goods sold 252,800 Depreciation expense 159,000 Investment income Not given Dividends declared 80,000 Retained earnings, 1/1/21 (758,000) Current assets 400,000 Copyrights 1,060,000 Royalty agreements 690,000 Investment in Stanza Not given Liabilities (690,000) Common stock (600,000) ($20 par) Additional paid-in capital (150,000) Note: Parentheses indicate a credit balance. Stanza $ (632,000) 158,000 210,000 @ 60,000 (206,000) 536,000 419,000...
please help with a,b,c,d
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021; $ $ Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/21 Current assets Copyrights Royalty agreements Investment in Stanza Liabilities Common stock Additional paid-in capital Penske (726,000) 259,100 198,000 Not given 80,000 (604,000) 514,000 984,000 650,000 Not given (570,000) (600,000) ($20 par) (150,000) Stanza (768,000) 192,000 230,000 0 60,000 (252,000) 506,000 472,500 1,088,000 0...
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018 Penske $ (796, 000) Stanza $632,000) Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/18 Current assets Copyrights Royalty agreements Investment in Stanza Liabilities Common stock Additional paid-in capital 284,100 153,000 158,000 258,000 Not given 80,000 (606, 000) 408,000 974,000 646,000 60,000 (362,000) 612,000 519,00 1,004,000 Not given (570,000) (1,337,000) (600,000) ($20 par) (200,000) ($10 par) (150,000) (80,000) Note:...
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Stanza (632,000) 158,000 258,000 Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/18 Current assets Copyrights Royalty agreements Investment in Stanza Liabilities Common stock Additional paid-in capital Penske (796, 000) 284,100 153, eee Not given 80,000 (686,000) 408, eee 974,000 646,000 Not given (570,000) (600,000) ($20 par) (150,000) 60,000 (362,000) 612, eee 519, eee 1,004,000 (1,337, eee) (200,000) ($10...
Following are selected account balances from Penske Company and
Stanza Corporation as of December 31, 2018:
Penske
Stanza
Revenues
$
(766,000
)
$
(724,000
)
Cost of goods sold
273,100
181,000
Depreciation expense
216,000
266,000
Investment income
Not given
0
Dividends declared
80,000
60,000
Retained earnings, 1/1/18
(790,000
)
(244,000
)
Current assets
506,000
660,000
Copyrights
964,000
532,500
Royalty agreements
668,000
1,186,000
Investment in Stanza
Not given
0
Liabilities
(684,000
)
(1,637,500
)
Common stock
(600,000
)
($20 par)
(200,000...
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Penske Stanza Revenues $ (708,000 ) $ (488,000 ) Cost of goods sold 252,800 122,000 Depreciation expense 190,000 250,000 Investment income Not given 0 Dividends declared 80,000 60,000 Retained earnings, 1/1/18 (752,000 ) (394,000 ) Current assets 518,000 500,000 Copyrights 1,044,000 415,000 Royalty agreements 690,000 1,020,000 Investment in Stanza Not given 0 Liabilities (638,000 ) (1,205,000 ) Common stock (600,000 ) ($20 par) (200,000...
Following are selected account balances from Penske Company and
Stanza Corporation as of December 31, 2018:
On January 1, 2018, Penske acquired all of Stanza’s outstanding
stock for $816,000 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 $516,000 book
value but a fair value of $600,000.
As of December 31, 2018, what is the consolidated copyrights
balance?
For the year...
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Penske Stanza Revenues $ (746,000 ) $ (792,000 ) Cost of goods sold 266,100 198,000 Depreciation expense 201,000 318,000 Investment income Not given 0 Dividends declared 80,000 60,000 Retained earnings, 1/1/18 (670,000 ) (214,000 ) Current assets 434,000 560,000 Copyrights 984,000 537,500 Royalty agreements 688,000 1,130,000 Investment in Stanza Not given 0 Liabilities (546,000 ) (1,517,500 ) Common stock (600,000 ) ($20 par) (200,000...
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Penske Stanza Revenues $ (832,000 ) $ (668,000 ) Cost of goods sold 296,200 167,000 Depreciation expense 202,000 306,000 Investment income Not given 0 Dividends declared 80,000 60,000 Retained earnings, 1/1/18 (768,000 ) (272,000 ) Current assets 468,000 622,000 Copyrights 916,000 587,000 Royalty agreements 704,000 1,058,000 Investment in Stanza Not given 0 Liabilities (582,000 ) (1,580,000 ) Common stock (600,000 ) ($20 par) (200,000...