On January 1, 2017, Panther, Inc., issued securities with a total fair value of $588,000 for 100 percent of Stark Corporation's outsta 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 $322,000, the fair value of its trademarks was assessed to be $60,000 m than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $206,000. TH 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 $87,500 for $175,000. As of December 31, 2017, Panther had resold 80 percent of thi inventory. In 2018, Panther bought from Stark $162,000 of inventory that had an original cost of $81,000. At the end of 2018, Pantl held $43,800 (transfer price) of inventory acquired from Stark, all from its 2018 purchases. During 2018, Panther sold Stark a parcel of land for $101,800 and recorded a gain of $18,200 on the sale. Stark still owes Panther $70,800 (current liability) related to the land sale. At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation. Panther, Inc. $ (810,800) 348,600 190,800 (18,200) (45,750) Stark Corporation $ (375,000) 196,700 84,200 $ Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings Net income Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 Cash and receivables Inventory Investment in Stark Trademarks Land, buildings, and equip. (net) Patented technology Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/18 Total liabilities and equity $ (94,100) $ (305,500) (94, 100) 32,000 $ (367,600) 176,000 125,400 (373,500) (335,350) 91,600 (617,250) 124,000 377,800 736,100 all 775,600 $ 2,013,500 (679,450) (400,000) (316,800) (617,250) (2,013,500) 66,000 318,600 142,200 $ 828,200 $ (266,500) (150,000) (44,100) (367,600) $ (828, 200) $ a. Show how Panther computed its $45,750 equity in Stark's earnings balance. b. Prepare a 2018 consolidated worksheet for Panther and Stark. consolidation Entries Consolidated Accounts Credit Debit Totals 11 $ 0 Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings Net income Retained earnings 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 Common stock Additional paid-in capital Retained earnings (above) Total liabilities & stockholders' equity Panther Stark $ (810,800) $ (375,000) 348,600 196,700 190,800 84,200 (18,200) (45,750) 0 $ (335,350) S (94,100) $ (373,500) $ (305,500) (335,350) (94,100) 91,600 32,000 $ (617,250) S (367,600) $ 124,000 $ 176,000 377,800 125,400 736,100 66,000 775,600 318,600 142,200 $ 2,013,500 $ 828,200 $ (679,450) S (266,500) (400,000) (150,000) (316,800) (44,100) (617,250) (367,600) (2,013,500) $ (828,200) s 0 0 S 0 a. Show how Panther computed its $45,750 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 $45,750 equity in Stark's earnings balance. Equity in Stark's earnings On January 1, 2017, Panther, Inc., issued securities with a total fair value of $588,000 for 100 percent of Stark Corporation's outsta 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 $322,000, the fair value of its trademarks was assessed to be $60,000 m than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $206,000. TH 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 $87,500 for $175,000. As of December 31, 2017, Panther had resold 80 percent of thi inventory. In 2018, Panther bought from Stark $162,000 of inventory that had an original cost of $81,000. At the end of 2018, Pantl held $43,800 (transfer price) of inventory acquired from Stark, all from its 2018 purchases. During 2018, Panther sold Stark a parcel of land for $101,800 and recorded a gain of $18,200 on the sale. Stark still owes Panther $70,800 (current liability) related to the land sale. At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation. Panther, Inc. $ (810,800) 348,600 190,800 (18,200) (45,750) Stark Corporation $ (375,000) 196,700 84,200 $ Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings Net income Retained earnings 1/1/18 Net income Dividends declared Retained earnings 12/31/18 Cash and receivables Inventory Investment in Stark Trademarks Land, buildings, and equip. (net) Patented technology Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/18 Total liabilities and equity $ (94,100) $ (305,500) (94, 100) 32,000 $ (367,600) 176,000 125,400 (373,500) (335,350) 91,600 (617,250) 124,000 377,800 736,100 all 775,600 $ 2,013,500 (679,450) (400,000) (316,800) (617,250) (2,013,500) 66,000 318,600 142,200 $ 828,200 $ (266,500) (150,000) (44,100) (367,600) $ (828, 200) $ a. Show how Panther computed its $45,750 equity in Stark's earnings balance. b. Prepare a 2018 consolidated worksheet for Panther and Stark. consolidation Entries Consolidated Accounts Credit Debit Totals 11 $ 0 Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings Net income Retained earnings 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 Common stock Additional paid-in capital Retained earnings (above) Total liabilities & stockholders' equity Panther Stark $ (810,800) $ (375,000) 348,600 196,700 190,800 84,200 (18,200) (45,750) 0 $ (335,350) S (94,100) $ (373,500) $ (305,500) (335,350) (94,100) 91,600 32,000 $ (617,250) S (367,600) $ 124,000 $ 176,000 377,800 125,400 736,100 66,000 775,600 318,600 142,200 $ 2,013,500 $ 828,200 $ (679,450) S (266,500) (400,000) (150,000) (316,800) (44,100) (617,250) (367,600) (2,013,500) $ (828,200) s 0 0 S 0 a. Show how Panther computed its $45,750 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 $45,750 equity in Stark's earnings balance. Equity in Stark's earnings