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.

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