Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $621100 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: Trademarks (indefinite lite) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Fair Values Values $ 100,500 $ 230,500 0 86, 100 436,000 401,500 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. ALLOY Systen. Die Eliseu anu paiu LIVIUEN US in te same perou. CIEUR Vaian Les die wilde wy paremuses. 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 $(1,327,500) 354,000 99,300 32,000 (198,830) $(1.041,030) $ (838,000) (1,041,030) 164,000 $(1,715,030) $ 220,000 378,000 177,000 717,930 666,000 O 1,100,000 0 $ 3,258,930 $(1,143,900) (400,000) (1,715,030) ${3,258,930) O'Brien $ (528,000) 232,000 83,400 0 0 $ (212,600) $ (281,000) (212,600) 102,000 $ (391,600) $ 147,500 85,200 202,000 0 88,500 0 296,000 0 $ 819,200 $ (327,600) (100,000) (391,600) $ (819, 200) a. Which investment method did Patrick use to compute the $198,830 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 a. Which investment method did Patrick use to compute the $198,830 income from O'Brien? b. Determine the totais to be reported for this business combination for the year ending December 31 c. Verify the total 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 $198,830 income from O'Brien? Which investment method did Patrick use to compute the $108,830 income from O'Brien? Required A Required B > 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 totalt es Revenues Cost of goods sold Amortization expenso Depreciation expense Income from O'Brien Net income Retained earings, 1/1 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 equities 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 enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this 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.) Show less Consolidated Totals PATRICK CORPORATION AND CONSOLIDATED SUBSIDIARY O'BRIEN Consolidation Worksheet For Year Ending December 31 Consolidation Entries Accounts Patrick O'Brien Debit Credit Revenues $ (1,327,500) $ (528,000) Cost of goods sold 354,000 232,000 Depreciation expense 99,300 83,400 Amortization expense 32,000 0 Income from O'Brien (198,830) 0 Net income $ (1,041,030) $ (212,600) Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 (838,000) (1,041,030) 164,000 (1.715,030) $ (281,000) (212,600) 102,000 (391,600) $ $ Cash Receivables 220,000 $ 378,000 177,000 717,930 147,500 85,200 202.000 Inventory Investment in O'Brien Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Net Income 354,000 99,300 32,000 (198,830) (1,041,030) 232,000 83,400 0 0 (212,600) $ S Retained earnings, 1/1 Net Income (above) Dividends declared Retained earnings, 12/31 (838,000) (1,041,030) 164,000 (1.715,030) $ (281,000) (212,600) 102.000 (391,600) $ $ 147,500 85.200 202.000 Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets 220,000 $ 378,000 177,000 717,930 666,000 0 1.100.000 88,500 0 0 296,000 0 819.200 $ 3.258,930 $ Liabilities Common stock Retained earnings (above) Total liabilities and equity (1.143,900) (400,000) 1,715,030 (3.258,930) 5 (327,600) (100,000) (391,600) (819.200) $