Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $642,600 in cash. O'Brien reported net assets with a carrying amount of $426,000 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: Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Fair Values Values $ 80,000 $ 194,000 @ 98,100 390,000 333,000 24209 ances @ 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. Patrick O'Brien Revenues $(1,552,500) $ (876,000) Cost of goods sold 414,000 406,000 Depreciation expense 91,200 75,000 Amortization expense 37,600 Incone from O'Brien (381,080) Net income $(1,390,780) $(395,000) Retained earnings 1/1 $(728,000) $ (326,000) Net Income (1,390,780) (395,000 Dividends declared 159,000 97,000 Retained earnings 12/31 $(1,959,780) 5 (624,000) Cash 233,000 5 138,500 Receivables 376,000 56,700 Inventory 253,000 160,000 Investment in O'Brien 926,680 Traflamark 564 ARA 70 GA $ Next 78,900 326,000 10 points Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 926,680 564, coe e 1,110, eee @ $ 3,462,689 $11,182,900) (480,000) (1,959,780) ${3,462,680) $760,100 5 (36,100) (100,000) (624, 000) $ (760,100) 02:41:15 Print References a. Which investment method did Patrick use to compute the $381,080 income from O'Brien? b. Determine the totals to be reported for this business combination for the year ending December 31 Verify the total determined in part (bxby 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 Determine the totals to be reported for this business combination for the year ending December 31. (Input all amounts as positive values.) Consolidated totals 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 eamings, 12/31 Total liabilities and equities Required a
