On January 1, 2017, Panther, Inc., issued securities with a total fair value of $581,000 for 100 percent of Stark Corporation's outstanding ownership shares. Stark has long supplied inventory to Panther. The companies expect to achieve synergies with production scheduling and product development with this combination. Although Stark's book value at the acquisition date was $333,000, the fair value of its trademarks was assessed to be $67,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $181,000. The trademarks were considered to have indefinite lives, and the estimated remaining life of the patented technology was eight years. In 2017, Stark sold Panther inventory costing $100,000 for $200,000. As of December 31, 2017, Panther had resold 75 percent of this inventory. In 2018, Panther bought from Stark $171,000 of inventory that had an original cost of $85,500. At the end of 2018, Panther held $46,100 (transfer price) of inventory acquired from Stark, all from its 2018 purchases. During 2018, Panther sold Stark a parcel of land for $107,300 and recorded a gain of $19,100 on the sale. Stark still owes Panther $74,400 (current liability) related to the land sale. At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation Stark Panther, Inc. Corporation (852, 200) $ (389,000) Cost of goods sold 366,600 204,100 Other operating expenses 200, 700 87,400 (19,100) Equity in Stark's earnings (57, 725) (361,725) $ (97,500) Retained earnings 1/1/18 (377,000) $ (316,600) Net Incone (361,725) (97,500) Dividends declared 98,800 35,500 Retained earnings 12/31/18 (639, 925) $(378,600) Cash and receivables $ 135,000 $ 186,000 Inventory 411, 100 132,400 748,900 Land, buildings, and equip. (net) 69, 700 Patented technology 844,100 336,400 150, 100 $ 2, 139, 100 $ 874,600 Revenues Gain on sale of land Net Income $ $ $ Investment in Stark Trademarks 0 8 Total assets 1 2 Check my . Patented technology Total assets Liabilities Common stock Additional paid in capital Retained earnings 12/31/18 Total liabilities and equity $ 2, 139, 100 (771,675) (400,000) (327,500) (639,925) $ (2,139, 100) 150, 100 $ 874,600 $ (286,300) (175,000) (34,700) (378,600) $ (874,600) a. Show how Panther computed its $57,725 equity in Stark's earnings balance. b. Prepare a 2018 consolidated worksheet for Panther and Stark Complete this question by entering your answers in the tabs below. Required A Required B Prepare a 2018 consolidated worksheet for Panther and Stark. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less PANTHER AND STARK Consolidation Worksheet Year Ending December 31, 2018 Consolidation Entries Accounts Panther Stark Debit Credit Consolidated Totals Revenues $ (852.200) $ (389,000) PANTHER AND STARK Consolidation Worksheet Year Ending December 31, 2018 Consolidation Entries Debit Credit Consolidated Totals Accounts $ 0 Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings Net income Retained earings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Cash and receivables Inventory Investment in Stark Trademarks Land, buildings, and equipment (net) Patented technology Total assets Liabilities Panther Stark $ (852,200) $ (389,000) 366,600 204,100 200,700 87 400 (19,100) 0 (57,725) 0 $ (361,725) $ (97,500) $ (377,000) $ (316,600) (361,725) (97,500) 98,800 35,500 $ (639,925) $ (378,600) $ 135,000 $ 186,000 411,100 132,400 748,900 0 0 69,700 844,100 336,400 0 150,100 $ 2,139,100 $ 874,600 $ (771,675) S (286,300) (400,000) (175,000) (327,500) (34,700) (639,925) (378,600) $(2,139,100) S (874,600) O Common stock Additional paid-in capital Retained earnings (above) Total liabilities & stockholders' equity 0 $ a. Show how Panther computed its $57,725 equity in Stark's earnings balance. b. Prepare a 2018 consolidated worksheet for Panther and Stark. Complete this question by entering your answers in the tabs below. Required A Required B Show how Panther computed its $57,725 equity in Stark's earnings balance. Fair value in excess of book value Equity in Stark's earnings Required B