Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $550,000 in cash. O'Brien reported net assets with a carrying amount of $350,000 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 $ 60,000 Trademarks (indefinite life) ...... Customer relationships (5-year remaining life) ... Equipment (10-year remaining life) ... Fair Values $160,000 75,000 312,000 342.000 Any goodwill is considered to have an indefinite life with no impairment charges during the year 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 (1.125,000) 300,000 75,000 25,000 (210,000) 1935,000) O'Brien 520.000) 228.000 70,000 Revenues... Cost of goods sold Depreciation expense.... Amortization expense ...... Income from O'Brien ...... Not Income... . Retained earnings 1/1 Net Income.. Dividends declared.......... Retained earnings 12/31..... 222.000) (250.000) (222.000) 80,000 (392,000) 105,000 56.000 135.000 $ (700,000) (935,000) 142.000 (1.493,000 185.000 225,000 175,000 680,000 474,000 $ 60,000 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... 272.000 925,000 -0- 2,664,000 (171.000 (400,000) (1,493,000 2.664,000 628,000 (136.000) (100,000) 392.000 628.000 $ a. Show how Patrick computed the $210,000 Income of O'Brien balance. Discuss how you determined which accounting method Patrick uses for its investment in O'Brien b. Without preparing a worksheet or consolidation entries, determine and explain 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