Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $654,200 in cash. O'Brien reported net assets with a carrying amount of $418,000 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 Fair Values Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) $ 97,000 $221,000 78,600 374,000 327,800 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 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 $(1,372,580) 366,000 O'Brien $ (688,000) 312,000 93,600 94,500 34,800 (271,380) $(1,148,500) $ (844,000) (1,148,580) 165,000 $(1,827,500) $ 249,000 $ (282,400) $ (318,000) (282,400) 103,000 $ (497,400) $ 122,000 85,288 414,880 258,000 146,000 822,500 514,000 65,700 958,000 328,000 $ 3,215,500 (988,080) (400,000) (1,827,500) $(3,215,500) $ 746,900 $ (149,500) (180,000) (497,400) (746,900) a. Which investment method did Patrick use to compute the $271,300 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. Answer is not complete. 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.) Consolidated totals Revenues S 2.000,500 Cost of goods sold $ 678.000 Amortization expense S 34.800x Depreciation expense S 0 Income from O'Brien 03 Net income S 1,148,500 Retained earnings. 1/1 S 844,000 Dividends declared $ 165.000 Retained earnings. 12/31 $ 1,827,500 Cash $ 371,000 Receivables S 499.200 Inventory S 404,000 Investment in O'Brien 0 Trademarks S 703,700 Customer relationships S 62,880 Equipment (net) S 1,244,420 Goodwill $ 79.800 Total assets $ 3.385.000 Liabilities Common stock $ 1,137,500 S 400.000 S 1,827,500 3,385,000 Retained earnings, 12/31 Total liabilities and equities S Prev Of Next