Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $623,500 in cash. O'Brien reported net assets with a carrying amount of $364,000 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 Fair Values Values Trademarks (indefinite life) $ 86,500 $ 215, 500 Customer relationships (5-year remaining life) 92, 400 Equipment (10-year remaining life) 347,080 305,300 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, 367, 500) $ (896,000) Cost of goods sold 198, 000 416, 000 Depreciation expense 38 , 200 Amortization expense 88 , 760 Income from O'Brien 37, 400 (377, 490) Net income $ (1,621, 390) $ (391, 800) Retained earnings 1/1 Net income * (736,100) (264,000) Dividends declared (1, 621, 390) (391, 690) 152, 090 90, Gee Retained earnings 12/31 $ (2,205, 390) (565, 800) Cash 5 Receivables 272,600 130, 500 422, 090 83, 160 Inventory 216, 098 223, 006 Prey. 1 of 1 NextInvestment in O'Brien 910, 990 Trademarks 598, 060 65, 400 Customer relationships Equipment (net) 1, 078, 060 292, 060 Goodwill Total assets $ 3, 446, 990 A 794, 060 Liabilities (841, 600) tA (128, 200) Common stock (400, 000) (100, 060 Retained earnings 12/31 (2, 205, 390) (008 's95) Total liabilities and equity $ (3, 446, 990) $ (794, 000) a. Which investment method did Patrick use to compute the $377,490 income from O'Brien b. Determine the totals to be reported for this business combination for the year ending De c. Verify the totals determined in part (b) by producing a consolidation worksheet for Patric December 31. o search F4 O CO