PROBLEM CHAPTER 3 (50 points) Lasko Corporation acquired 100 percent of Marco Company's outstanding common stock on January 1 for $642,600 in cash. Marco reported net assets with a carrying amount of $426,000 at that time. Some of Marco'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 Fair Values $ 80,000 $194,000 0 98,100 390,000 333,000 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. Marco 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 Lasko $(1,552,500) Marco $ (876,000) 406,000 91,200 75,000 414,000 37,600 (381,080) $(1,390,780) $ (728,000) (1,390,780) 159,000 $(1,959,780) $ 233,000 376,000 253,000 0 0 $ (395,000) $ (326,000) (395,000) 97,000 $ (624,000) $ 138,500 Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 56,700 160,000 926,680 0 564,000 78,900 0 0 1,110,000 326,000 0 0 $ 3,462,680 $ 760,100 $(1,102,900) $ (36,100) (400,000) (1,959,780) (100,000) (624,000) $(3,462,680) $ (760,100) Required: Prepare a consolidation worksheet for Lasko and Marco for the year ending December 31.