Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $711,300 in cash. O'Brien reported net assets with a carrying amount of $396,000 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) 299,060 Customer relationships (5-year remaining life) 104,400 Equipment (10-year remaining life) 393, 080 340, 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. Patrick O'Brien Revenues $ (1, 380,000) (eee'tez) Cost of goods sold 368, 060 320, 080 Depreciation expense 104, 760 89, 400 Amortization expense 36, 800 Income from O'Brien (278,940) Net income $(1, 149, 440) $ (294, 600 Retained earnings 1/1 Net income (1, 149,440) (294, 600) Dividends declared 166, 090 104, 000 Retained earnings 12/31 $ (1, 777, 440) (486, 600) Cash 242,000 121, 000 Receivables 338, 060 57,900 Inventory 246, 000 186, 090 Investment in O'Brien 886, 240 Trademarks 526,000 83, 700 Customer relationships Equipment (net) 928, 000 281, 000 Goodwill Total assets $ 3,166, 240 729,600 Liabilities (988,800) (143,060) Common stock (ese 'eat) (eee 'eet) Retained earnings 12/31 (1,777,440) (486, 600) Total liabilities and equity $ (3,166, 240) $ (729,600) a. Which investment method did Patrick use to compute the $278,940 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 $278,940 income from O'Brien? Which investment method did Patrick use to compute the $278,940 income from O'Brien? Requireu A Requireu a Requireu Required A Required B 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 Determine the totals to be reported for this busines enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this positive values.) 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.) Consolidated Show lessA totals PATRICK CORPORATION AND CONSOLIDATED SUBSIDIARY O'BRIEN Revenues Consolidation Worksheet Cost of goods sold For Year Ending December 31 Amortization expense Consolidation Entries Consolidated Accounts Patrick O'Brien Debit Credit Depreciation expense Totals Revenues $ (1,380,000) $ (704,000) Income from O'Brien Cost of goods sold 368,000 320,000 Net income Depreciation expense 104.700 89.400 Retained earnings, 1/1 Amortization expense 36.800 Dividends declared Income from O'Brien (278,940) Net income (1.149.440) 294,600) Retained earnings, 12/31 Cash Retained earnings, 1/1 (794,000) (296,000)