Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $654,200 in cash. O'Brien reported net assets with a carrying amount of $418,000 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 life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Values $ 97,000 0 374,000 Fair Values $ 221,000 78,600 327,800 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. 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 Patrick $(1,372,500) 366,000 94,500 34,800 (271,300) $(1,148,500) $ (844,000) (1,148,500) 165,000 $(1,827,500) $ 249,000 414,000 258,000 822,500 514,000 0 958,000 0 $ 3,215,500 $ (988,000) (400,000) (1,827,500) $(3,215,500) O'Brien $ (688,000) 312,000 93,600 0 0 $ (282,400) $ (318,000) (282,400) 103,000 $ (497,400) $ 122,000 85,200 146,000 0 65,700 0 328,000 0 $ 746,900 $ (149,500) (100,000) (497, 400) $ (746,900) Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 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 totals Revenues Cost of goods sold Amortization expense Depreciation expense Income from O'Brien Net income Retained earnings, 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 A Consolidated Totals Accounts Revenues PATRICK CORPORATION AND CONSOLIDATED SUBSIDIARY O'BRIEN Consolidation Worksheet For Year Ending December 31 Consolidation Entries Patrick O'Brien Debit Credit $ (1,372,500) $ (688,000) 366,000 312,000 94,500 93,600 34,800 0 (271,300) 0 $ (1,148,500) $ (282,400) Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Net income Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 (844,000) (1,148,500) 165,000 (1,827,500) (318,000) (282,400) 103,000 (497,400) $ $ $ 122,000 Cash Receivables Inventory Investment in O'Brien 249,000 414,000 258.000 85,200 146,000 822.500 Consolidated Consolidation Entries Debit Credit Accounts O'Brien Totals $ $ (688,000) 312,000 Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien Patrick (1,372,500) 366,000 94,500 34,800 (271,300) (1,148,500) 93,600 0 0 Net income $ $ (282,400) Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 (844,000) (1,148,500) 165,000 (1,827,500) (318,000) (282,400) 103,000 (497,400) $ $ $ $ 122,000 Cash Receivables 249,000 414,000 85,200 258,000 146,000 Inventory Investment in O'Brien 822,500 514,000 65,700 0 0 Trademarks Customer relationships Equipment (net) Goodwill 958,000 328,000 0 0 Total assets $ 3,215,500 $ 746,900 Liabilities Common stock (988,000) (400,000) 1,827,500 (3,215,500) $ (149,500) (100,000) (497,400) (746,900) $ Retained earnings (above) Total liabilities and equity $ 0 $ 0