On January 1, 2017, Panther, Inc., issued securities with a total fair value of $618,000 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 $338,000, the fair value of its trademarks was assessed to be $72,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $208,000. 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 $107,500 for $215,000. As of December 31, 2017, Panther had resold 68 percent of this inventory. In 2018, Panther bought from Stark $178,000 of inventory that had an original cost of $89,000.

At the end of 2018, Panther held $48,000 (transfer price) of inventory acquired from Stark, all from its 2018 purchases.

During 2018, Panther sold Stark a parcel of land for $111,800 and recorded a gain of $19,800 on the sale. Stark still owes Panther $77,200 (current liability) related to the land sale.

At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation.

Show how Panther computed its $63,800 equity in Stark's earnings balance. Equity in Stark's earnings Show less Accounts Consolidated Totals 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 AND STARK Consolidation Worksheet Year Ending December 31, 2018 Consolidation Entries Stark Debit Credit $ (884,200) $ (396,000) 380,400 207,800 208,200 89,000 (19,800) (63,800)| 01 $ (379,200) $ (99,200) $ (378,500) $ (322,200) (379,200) (99,200) 103,600 37,500 $ (654,100) $ (383,900) $ 141,000 $ 192,000 429,300 136,600 790,6000 0 71,900 881,600 347,000 154,800 $ 2,242,500 $ 902,300 $ (855,600) $ (295,900) (400,000) (190,000) (332,800) (32,500) (654,100) (383,900) | $(2,242,500) $ (902,300)