Patrick Corporation acquired 100 percent of OBrien Companys outstanding common stock on January 1, for $631,300 in cash. OBrien reported net assets with a carrying amount of $368,000 at that time. Some of OBriens assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows:

Patrick Corporation acquired 100 percent of O Brien Company's outstanding common stock on January 1, for $631,300 in cash. O'Brien reported net assets with a carrying amount of $368,000 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: Fair Values Trademarks (indefinite 1ife) Customer relationships (5-year remaining life) quipment (18-year remaining life) 183,08 225,88e 88,58e 329,488 368,886 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. o'Brien Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien $(1,280,88)(728,808) 332,808 99, 600 328,808 182,808 35,688 281,76e Net income $(1,824,168) $ (296,488) Retained earnings 1/1 Net income Dividends declared $ (724,8e8) s (281,808) (296,488) 88,808 (1,824, 16e) 158,80 3(1,598,168) (489.4 $19e,ee Retained earnings 12/31 Cash Receivables Inventory Investment in O"Brien Trademarks Customer relationships Equipment (net) Goodwil1 122,588 72,300 221,eee 414,808 251,808 838,868 488,888 87,888 1,838,808 $3,211, 868 (486,808) $(3,211, 868) 273,868 775,898 $(1,212,9) (186,488) (188,88) (1,598,168489,488) $ (775,888) Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity a. Which investment method did Patrick use to compute the $281,760 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 BRequired C Which investment method did Patrick use to compute the $281,760 income from O'Brien? Which investment method did Patrick use to compute the $281,760 income from O'Brien? Determine the totals to be reported for this business combination for the year ending December 31 Totals Revenues Cost of goods sold Amortization expense Depreciation expense Income of O Brien Net income Retained earnings Dividends declared earnings, 12/31 Cash Receivables Inventory Investment in O Brien Trademarks Customer relationships Equipment Goodwill Total assets Liabilities Common stock earnings, 12/31 Total liabilities and equities S 3,397.460 PATRICK CORPORATION AND CON SOLIDATED SUBSIDIARY O BRIEN Consolidation Worksheet For Year Ending December 31 Consolidation Entries Consolidated Accounts Patrick O'Brien Debit Credit Totals Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien 5 1,200,000) 320,000 102,000 35,600 (281.760 (728,000 332,000 99,600 Net income 5 (1,024,160)S 296.400 Retained earnings, 1/1 Net income (above) Dividends declared (724.000 (1,024,160) 150,000 5 1,598,160) (281.000) (296,400) 88,000 (489.400 earnings, 12/31 Cash Receivables Inventory Investment in O Brien Trademarks Customer relationships Equipment (net) Goodwill 190,000S 414,000 251,000 838,060 480,000 122,500 72,300 221,000 87,000 1,038,000 273,000 Total assets 3,211,060 S 775,800 Liabilities Common stock Retained earnings (above) (1,212,900) 400,000 1,598,160 186,400 00,000 (489.400 (775,800)S Total liabilities and equity 5 (3,211,060)S