Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $653,100 in cash. O'Brien reported net assets with a carrying amount of $389,000 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 Fair Values Values $ 84,000 $ 217,000 0 102,000 364,000 316,000 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 $ (872,000) 404,000 73,200 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) 320,000 100,200 27,000 (379,200) $(1,132,000) $ (894,000) (1,132,000) 145,000 $(1,881,000) $ 243,000 358,000 181,000 1,007,300 482,000 $ (394,800) $ (347,000) (394,800) 83,000 $ (658, 800) $ 136,000 60,900 220,000 77,100 938,000 316,000 $ 3,209,300 $ (928, 300) (400,000) (1,881,000) $ (3,209,300) $ 810,000 $ (51,200) (100,000) (658, 800) $ (810,000)