On January 1, 2017, Panther, Inc., issued securities with a total fair value of $555,000 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 $307,000, the fair value of its trademarks was assessed to be $51,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $197,000. 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 $72,500 for $145,000. As of December 31, 2017, Panther had resold 79 percent of this inventory. In 2018, Panther bought from Stark $148,000 of inventory that had an original cost of $74,000. At the end of 2018, Panther held $40,100 (transfer price) of inventory acquired from Stark, all from its 2018 purchases During 2018, Panther sold Stark a parcel of land for $93,000 and recorded a gain of $16,800 on the sale. Stark still owes Panther $65,200 (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. (746,700) 320,900 175,700 (16,800) 45,350) $ (312,250) Stark Corporation Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark's earnings $ (366,000) 192,100 82,300 $ (91,600) $ (297,300) (91,600) 28,000 Net income Retained earnings 1/1/18 Net income Dividends declared $ (369,500) (312,250) 85.300 $(596,450) $ (360,900) Retained earnings 12/31/18 Cash and receivables Inventory Investment in Stark Trademarks Land, buildings, and equip. (net) Patented technology 112,000 341,400 692,600 $ 164,000 117,000 61,600 297,400 132,800 $ 772,800 700,600 $1,846,600 Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/18 $ (542,450) (400,000) (307,700) (596,450) $ (242,100) (120,000) (49,800) 360,900 Total liabilities and equity $ (1,846,600) $ (772,800) a. Show how Panther computed its $45,350 equity in Stark's earnings balance b. Prepare a 2018 consolidated worksheet for Panther and Stark