Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $662,300 in cash. O'Brien reported net assets with a carrying amount of $421,000 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 Fair Values Values $ 89,000 $ 195,000 0 102,000 387,000 340,800 Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) 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 O'Brien Revenues $(1,155,000) $ (572,000) Cost of goods sold 308,000 254,000 Depreciation expense 95,400 89,700 Amortization expense 34,400 0 Income from O'Brien (212,520) 0 Net income s (929,720) $ (228,300) Retained earnings 1/1 $ (744,000) $ (298,000) Net income (929,720) (228,300) Dividends declared 153,000 91,000 Retained earnings 12/31 $(1,520,720) $ (435,300) Cash $ 244.000 $ 127.500 Next > Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $662,300 in cash. O'Brien reported net assets with a carrying amount of $421,000 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 Fair Values Values $ 89,000 $ 195,000 0 102,000 387,000 340,800 Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) 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 O'Brien Revenues $(1,155,000) $ (572,000) Cost of goods sold 308,000 254,000 Depreciation expense 95,400 89,700 Amortization expense 34,400 0 Income from O'Brien (212,520) 0 Net income s (929,720) $ (228,300) Retained earnings 1/1 $ (744,000) $ (298,000) Net income (929,720) (228,300) Dividends declared 153,000 91,000 Retained earnings 12/31 $(1,520,720) $ (435,300) Cash $ 244.000 $ 127.500 Next >