Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $622,100 in cash. O'Brien reported net assets with a carrying amount of $381,000 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) $ 89,500 Customer relationships (5-year remaining life) Equipment (10-year remaining life) 396,000 0 Fair Values $ 220,500 80,100 348,900 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. es 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 Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Inventory Total assets Liabilities Patrick $(1,822,500) 486,000 96,600 27,800 (303,690) $(1,515,790) $ (728,000) (1,515,790) 147,000 $(2,096,790) $ O'Brien $ (740,000) 338,000 87,000 $ (315,000) $ (281,000) (315,000) 85,000 $ (511,000) 139,500 63,900 139,000 236,000 $ 374,000 211,000 840,790 8 610,000 66,000 0 8 1,042,000 291,000 0 0 $ 3,313,790 $ 699,400 $ (88,400) Common stock Retained earnings 12/31 Total liabilities and equity $ (817,000) (400,000) (2,096,790) $(3,313,790) (100,000) (511,000) $ (699,400) a. Which investment method did Patrick use to compute the $303,690 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.