Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $663,600 in cash. O'Brien reported net assets with a carrying amount of $377,000 at that time. Some of O'Brien's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows: Book Values $ 92,000 Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life Fair Values $ 270,000 95,400 292,300 352,000 Any goodwill is considered to have an indefinite life with no impairment charges during the year. Following are financial statements at the end of the first year for these two companies prepared from their separately maintained accounting systems. O'Brien declared and paid dividends in the same period. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Patrick $(1,612,500) 430,000 83,400 39,400 (363,790) O'Brien $ (832,000) 384,000 71,100 UU UIVIUCIUJ III LIIC JUHC PGlivu. VICUIL wulunetJ UCHUILUCU Ny pui CiUITJEJ. O'Brien $ (832,000) 384,000 71,100 0 Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Net income Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity Patrick $(1,612,500) 430,000 83,400 39, 400 (363, 790) $(1,423, 490) 78,000) (1,423,490) 155,000 $ (2,046,490) 195,000 400,000 203,000 973, 390 486,000 $ (376,900) (316,000) ( 376,900) 93,000 $ 599,900) 123,500 59, 700 137,000 69,600 990,000 366,000 S 3,247,390 (800, 900) ( 400,000) 2046490) S (3247390 755, 800 55, 900) (100,000) (599) 900) 755 800) S a. Which investment method did Patrick use to compute the $363,790 income from O'Brien? b. Determine the totals to be reported for this business combination for the year ending December 31. c. Verify the totals determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31. Complete this question by entering your answers in the tabs below. Required A Required B Required C Which investment method did Patrick use to compute the $363,790 income from O'Brien? Which investment method did Patrick use to compute the $363,790 income from O'Brien? Required B > Required A Required B Required C Determine the totals to be reported for this business combination for the year Totals ULIPWL Revenues Cost of goods sold Amortization expense Depreciation expense Income of O'Brien Net income Retained earnings. Dividends declared Retained earnings, 12/31 Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment Goodwill Total assets Liabilities 1 of 2 # NE Revenues Cost of goods sold Amortization expense Depreciation expense Income of O'Brien Net income T Retained earnings, 1/1 Dividends declared Retained earnings, 12/31 Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment Goodwill Total assets Liabilities Common stock Retained earnings, 12/31 Total liabilities and equities $ 3,303,290 (1.1001 preciation expense hortization expense come from O'Brien Net income 83,400 39,400 (363,790) (1,423,490) $ (376,900) letained earnings, 1/1 let income (above) Dividends declared Retained earnings, 12/31 (778,000) (1,423,490) 155,000 (2,046,490) $ (316,000) (376,900) 93,000 (599,900) $ Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets w 195,000 400,000 203,000 973,390 486,000 123,500 59,700 137,000 990,000 366,000 0 WHO 3,247,390 $ 755,800 $ Liabilities Common stock Retained earnings (above) Total liabilities and equity (800,900) (400,000) 2,046,490 (3.247,390) (55,900) (100,000) (599,900) (755,800) $ $