28. Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January I for $550,000 in cash. O'Brien reported net assets with a carrying amount of $350,000 at that time. Some of O'Brien's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows: Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Values Fair Values $ 60,000 $160,000 -0- 75,000 342,000 312,000 Any goodwill is considered to have an indefinite life with no impairment charges during the year. The following are financial statements at the end of the first year for these two companies prepared from their separately maintained accounting systems. O'Brien declared and paid dividends in the same period. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Net Income Retained earnings 1/1 Net Income Dividends declared Retained earnings 12/31 Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity Patrick $(1,125,000) 300,000 O'Brien $(520,000) 228,000 75,000 25,000 70,000 -0- (210.000) -0- $ (935,000) $(222,000) $ (700,000) $(250,000) (935,000) 142,000 $(1,493,000) $ 185,000 225,000 175,000 680,000 474,000 -0- 925,000 -0- $ 2,664,000 $ (771,000) (400,000) (1.493,000) $(2,664,000) (222,000) 80,000 $(392,000) $ 105,000 56,000 135,000 -0- 60,000 -0- 272,000 -0- $ 628,000 $(136,000) (100,000) (392,000) $(628,000) a. Show how Patrick computed the $210,000 Income of O'Brien balance. Discuss how you determined which accounting method Patrick uses for its investment in O'Brien. b. Without preparing a worksheet or consolidation entries, determine and explain the totals to be reported for this business combination for the year ending December 31. c. Verify the totals determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31