On January 1, 2017, Panther, Inc., issued securities with a total fair value of $636,000 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 $356,000, the fair value of its trademarks was assessed to be $80,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $200,000. 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 $125,000 for $250,000. As of December 31, 2017, Panther had resold 72 percent of this inventory. In 2018, Panther bought from Stark $191,000 of inventory that had an original cost of $95,500. At the end of 2018, Panther held $51,600 (transfer price) of inventory acquired from Stark, all from its 2018 purchases. During 2018, Panther sold Stark a parcel of land for $120,300 and recorded a gain of $21,100 on the sale. Stark still owes Panther $82,400 (current liability) related to the land sale. At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation. Stark Corporation $ (412,000) 216,200 92,600 Panther, Inc. (943,700) 406,100 222,200 (21,100) (66,300) (402,800) Revenues Cost of goods sold Other operating expenses Gain on sale of land Equity in Stark 's earnings 0 $(103,200) Net income Retained earnings 1/1/18 Net income (383,500) (402,800 110,100 $ (335,300) (103,200 41,500 Dividends declared (676,200) 157,000 477,900 849,200 Retained earnings 12/31/18 (397,000) $ 209,000 148,500 Cash and receivables Inventory Investment in Stark Trademarks Land, buildings, and equip. (net) Patented technology 78,100 376,900 168,200 981,700 $ 2,465,800 $ (1,046,200) (402,000) (341,400 (676,200) 980,700 $ (314,600 (221,000) (48,100 (397,000) Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/18 Total liabilities and equity (2,465,800) $ (980,700) a. Show how Panther computed its $66,300 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 $66,300 equity in Stark's earnings balance. Equity in Stark's earnings 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 lessA PANTHER AND STARK Consolidation Worksheet Year Ending December 31, 2018 Consolidation Entries Consolidated Totals Credit Accounts Panther Stark Debit (943,700) $ (412,000) Revenues Cost of goods sold 216,200 406,100 Other operating expenses 222,200 92,600 (21,100) Gain on sale of land 0 Equity in Stark's earnings (66,300) 0 (402,800) (103,200) Net income $ (383,500) $ (335,300) Retained earnings 1/1 Net income (above) (103,200) (402,800) 110,100 41,500 Dividends declared (676,200) (397,000) Retained earnings 12/31 Cash and receivables $ $ 157,000 209,000 Inventory 477,900 148,500 Investment in Stark 849,200 Trademarks 0 78,100 Land, buildings, and equipment (net) 981,700 376,900 Patented technology 0 168,200 2,465,800$ Total assets 980,700 $(1,046,200) $ (314,600) Liabilities Common stock (402,000) (221,000) (341,400) (676,200) Additional paid-in capital (48,100) Retained earnings (above) (397,000) $(2,465,800) $ (980,700) Total liabilities & stockholders' equity