On January 1, 2020, Panther, Inc., issued securities with a total fair value of $588,000 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 $322,000, the fair value of its trademarks was assessed to be $60,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $206,000. The trademarks were considered to have indefinite lives, and the estimated remaining life of the patented technology was eight years.

In 2020, Stark sold Panther inventory costing $87,500 for $175,000. As of December 31, 2020, Panther had resold 80 percent of this inventory. In 2021, Panther bought from Stark $162,000 of inventory that had an original cost of $81,000. At the end of 2021, Panther held $43,800 (transfer price) of inventory acquired from Stark, all from its 2021 purchases.

During 2021, 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 2021, Panther and Stark prepared the following statements for consolidation.

Panther, Inc.Stark CorporationRevenues$(810,800)$(375,000)Cost of goods sold348,600196,700Other operating expenses190,80084,200Gain on sale of land(18,200)0Equity in Stark's earnings(45,750)0Net income$(335,350)$(94,100)Retained earnings, 1/1/21$(373,500)$(305,500)Net income(335,350)(94,100)Dividends declared91,60032,000Retained earnings, 12/31/21$(617,250)$(367,600)Cash and receivables$124,000$176,000Inventory377,800125,400Investment in Stark736,1000Trademarks066,000Land, buildings, and equip. (net)775,600318,600Patented technology0142,200Total assets$2,013,500$828,200Liabilities$(679,450)$(266,500)Common stock(400,000)(150,000)Additional paid-in capital(316,800)(44,100)Retained earnings, 12/31/21(617,250)(367,600)Total liabilities and equity$(2,013,500)$(828,200)

1. Show how Panther computed its $45,750 equity in Stark's earnings balance.
2. Prepare the 2021 consolidated worksheet for Panther and Stark.