Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $644,300 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 life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Values $ 193,000 o 360,000 Fair Values $ 225,000 88,500 329,400 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 Patrick $(1,200,000) 320, eee 102,000 35,600 (281,760) $(1.024.160) O'Brien $ (728,000) 332,000 99,600 e @ $ (296,400) 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 $(1,200,000) 320,000 102,000 35,600 (281,760) $(1,024,160) $ (724,000) (1,024,160) 150,000 $(1,598,160) 190,000 414,000 251,000 838,060 480,000 @ 1,038,000 O'Brien $ (728,000) 332,000 99,600 0 0 $ (296,400) $ (281,000) (296,400) 88,000 $ (489,400) 122,500 72,300 221,000 @ 87,000 $ 3,211,060 $(1,212,900) (400,000) (1,598,160) $(3,211,060) 273,000 @ $ 775,800 $ (186,400) (100,000) (489,400) $ (775, 800) 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 B Required 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? 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 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 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 Accounts Consolidated Totals $ Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien For Year Ending December 31 Consolidation Entries Patrick O'Brien Debit Credit (1,200,000) $ (728,000) 320,000 332,000 102,000 99,600 35,600 0 (281,760) 0 (1,024,160) $ (296,400) Net income $ Retained earnings, 1/1 Net income (above) (724,000) (1,024,160) 150,000 (1,598,160) $ (281,000) (296,400) 88,000 (489,400) Dividends declared Retained earnings, 12/31 $ Cash $ 190.000 $ 122,500 72.300 Receivables Inventory Investment in O'Brien 414,000 251.000 838.060 221000 Cash $ 190,000 $ 414,000 251,000 838,060 480,000 0 122,500 72,300 221,000 Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill 87.000 0 273,000 1,038,000 0 0 Total assets $ 3,211,060 $ 775,800 Liabilities Common stock Retained earnings (above) Total liabilities and equity (1,212,900) (400,000) 1,598, 160 (3,211.060) $ (186,400) (100,000) (489,400) (775 800) $ Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $644,300 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 life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Values $ 193,000 o 360,000 Fair Values $ 225,000 88,500 329,400 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 Patrick $(1,200,000) 320, eee 102,000 35,600 (281,760) $(1.024.160) O'Brien $ (728,000) 332,000 99,600 e @ $ (296,400) 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 $(1,200,000) 320,000 102,000 35,600 (281,760) $(1,024,160) $ (724,000) (1,024,160) 150,000 $(1,598,160) 190,000 414,000 251,000 838,060 480,000 @ 1,038,000 O'Brien $ (728,000) 332,000 99,600 0 0 $ (296,400) $ (281,000) (296,400) 88,000 $ (489,400) 122,500 72,300 221,000 @ 87,000 $ 3,211,060 $(1,212,900) (400,000) (1,598,160) $(3,211,060) 273,000 @ $ 775,800 $ (186,400) (100,000) (489,400) $ (775, 800) 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 B Required 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? 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 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 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 Accounts Consolidated Totals $ Revenues Cost of goods sold Depreciation expense Amortization expense Income from O'Brien For Year Ending December 31 Consolidation Entries Patrick O'Brien Debit Credit (1,200,000) $ (728,000) 320,000 332,000 102,000 99,600 35,600 0 (281,760) 0 (1,024,160) $ (296,400) Net income $ Retained earnings, 1/1 Net income (above) (724,000) (1,024,160) 150,000 (1,598,160) $ (281,000) (296,400) 88,000 (489,400) Dividends declared Retained earnings, 12/31 $ Cash $ 190.000 $ 122,500 72.300 Receivables Inventory Investment in O'Brien 414,000 251.000 838.060 221000 Cash $ 190,000 $ 414,000 251,000 838,060 480,000 0 122,500 72,300 221,000 Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill 87.000 0 273,000 1,038,000 0 0 Total assets $ 3,211,060 $ 775,800 Liabilities Common stock Retained earnings (above) Total liabilities and equity (1,212,900) (400,000) 1,598, 160 (3,211.060) $ (186,400) (100,000) (489,400) (775 800) $