****I only need to understand where this previously answered question got the below figures of Retained Earnings for $340,000and Difference (Cash & book) for $260,400 . I will post the original question below, but I only need to know where the Retained Earnings amount came from and Difference ( Cash & Books) Please show work. Thank you.

Common stock	100000
Retained earnings 1/1	340000
Difference (cash & book)	260400
To investment in oberin		700400

Patrick Corporation acquired 100 percent of OBrien Companys outstanding common stock on January 1 for $700,400 in cash. OBrien reported net assets with a carrying amount of $440,000 at that time. Some of OBriens assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows:

	Book Values		Fair Values
Trademarks (indefinite life)	$	94,500	$	238,500
Customer relationships (5-year remaining life)		0		75,000
Equipment (10-year remaining life)		352,000		310,300

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. OBrien declared and paid dividends in the same period. Credit balances are indicated by parentheses.

	Patrick				O'Brien
Revenues	$	(1,725,000	)		$	(676,000	)
Cost of goods sold		460,000				306,000
Depreciation expense		104,400				72,600
Amortization expense		34,800				0
Income from O'Brien		(286,570	)			0
Net income	$	(1,412,370	)		$	(297,400	)
Retained earnings 1/1	$	(796,000	)		$	(340,000	)
Net income		(1,412,370	)			(297,400	)
Dividends declared		167,000				105,000
Retained earnings 12/31	$	(2,041,370	)		$	(532,400	)
Cash	$	203,000			$	154,500
Receivables		294,000				74,700
Inventory		181,000				205,000
Investment in O'Brien		881,970				0
Trademarks		516,000				69,900
Customer relationships		0				0
Equipment (net)		932,000				324,000
Goodwill		0				0
Total assets	$	3,007,970			$	828,100
Liabilities	$	(566,600	)		$	(195,700	)
Common stock		(400,000	)			(100,000	)
Retained earnings 12/31		(2,041,370	)			(532,400	)
Total liabilities and equity	$	(3,007,970	)		$	(828,100	)

Book value	440000
Excess of fairvalue over book value
trademark	144000
Customer relationship	75000
Equipment	-41700
Fair value of net assets	617300
Purchase price	700400
Goodwill	83100

Amortisation depreciation differenctial
Customer relationship	=excess of fair value over bookvalue/useful life
	=75000/5
	15000
Equipment	=lowe of fairvalue over book value/useful life
	=-41700/10
	-4170

Patrick uses equity method
Net income of oberin	297400
Less amortisation differential	-15000
Add: depreciation differential	4170
Income from Oberin	286570

Elimination entry
Income from oberin	286570
To dividend		105000
To investment in oberin		181750
Common stock	100000
Retained earnings 1/1	340000
Difference (cash & book)	260400
To investment in oberin		700400