Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $760,500 in cash. O'Brien reported net assets with a carrying amount of $412,000 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 Trademarks (indefinite life) $ 102,000 Customer relationships (5-year remaining life) Equipment (10-year remaining life) 0 359,000 Fair Values $ 299,000 96,600 329,000 Any goodwill is considered to have an indefinite life with no impairment charges during the year. The 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 Net income Retained earnings 1/1 Net income Dividends declared Cash Retained earnings 12/31 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 $(1,815,000) 484,000 104,100 28,200 (348,280) $(1,546,980) $ (764,000) (1,546,980) 154,000 $(2,156,980) $ 238,000 322,000 202,000 O'Brien $ (856,000) 396,000 95,400 0 $ (364,600) $ (312,000) (364,600) 92,000 $ (584,600) $ 121,000 68,400 168,000 1,016,780 0 518,000 79,800 0 0 944,000 276,000 0 $ 3,240,780 713,200 $ (683,800) (400,000) (2,156,980) (28,600) (100,000) (584,600) $(3,240,780) $ (713,200) a. Which investment method did Patrick use to compute the $348,280 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 $348,280 income from O'Brien? Which investment method did Patrick use to compute the $348,280 income from O'Brien? < Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the totals to be reported for this business combination for the year ending December 31. (Input all amounts as positive values.) Revenues Cost of goods sold Amortization expense Depreciation expense Income from O'Brien Net income Retained earnings, 1/1 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 equities Consolidated totals Required A Required B Required C < Required A Required C > Verify the totals determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31. (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. Input all amounts as positive values.) PATRICK CORPORATION AND CONSOLIDATED SUBSIDIARY O'BRIEN Consolidation Worksheet For Year Ending December 31 Consolidation Entries Consolidated Accounts Revenues Cost of goods sold Depreciation expense $ Patrick (1,815,000) $ O'Brien Debit Credit Totals (856,000) 484,000 396,000 104,100 95,400 Amortization expense Income from O'Brien 28,200 (348,280) 0 0 Net income $ (1,546,980) $ (364,600) Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 (764,000) (1,546,980) (312,000) 154,000 (364,600) 92,000 $ (2,156,980) $ (584,600) Cash $ 238,000 $ 121,000 Receivables 322,000 Inventory 202,000 68,400 168,000 Investment in O'Brien 1,016,780 Trademarks 518,000 79,800 Customer relationships 0 0 Equipment (net) Goodwill 944,000 276,000 Total assets $ 3,240,780 S 713,200 Liabilities Common stock (683,800) (400,000) (28,600) (100,000) Retained earnings (above) (2,156,980) (584,600) Total liabilities and equity $ (3,240,780) $ (713,200) Show less