saved 5 Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1 for $642,600 in cash. O'Brien reported net assets with a carrying amount of $426,000 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: 10 points Trademarks (indetinite ile) Customer relationship (5-year remaining 11to) Equipment (10-year remaining life) look Tale Valises Values $ 80,000 $199,000 0 90,100 390.000 333,000 eBook Print References 75,000 Any goodwill is considered to have an iiklefinite 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. Patrick Revenge Orien $(1,552,500) 5 1876.000) Cost of goods sold 414,000 406.000 Depreciation expense 91,200 Amortisation expense 37.600 0 Income from O'Brien (81.080) 0 Net Income $(1,390,780) $ 395,000) Retained earnings 1/1 6 (728,000) $(326,000) Net Income (1,390,780) (395,000) Dividends declared 159.000 97,000 Retained carnings 12/31 ${1.959,780) 1624.000) Canh 233.000 $ 138,500 Receivables 376,000 56,709 Inventory 253,000 160,000 Investment in O'Brien 926.680 Trademarks 564,000 78.900 Customer relationships 326,000 Equipment (net) 1,110,000 Goodwill Total assets $ 3,462,680 $760,100 10 points eBock Print 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. Patrick Revenues O'Brien ${1,552,500) Cost of goods sold 5 (876,000) 614,000 Depreciation expense 405,000 91,200 Amortization expense 75,000 37,600 0 Income from O'Brien (381,080) 0 Net incon ${1,390,780) $ (395,000) Retained earnings 1/1 $ (728,000) $ (326,000) Net Income (1.390,780) (395,000) Dividends declared 159.000 97.000 Retained earnings 12/31 $(1,959,780) 5 (624,000) Cash 5 233,000 $ 138,500 Receivables 376,000 56,790 Inventory 253,000 160,000 Investment in O'Brien 926,60 Trademarks 564,000 78.900 Customer relationships 0 0 Equipment (net) 1,110,000 326,000 Goodwill 0 Total assets $ 3,462,680 $760,100 Liabilities $(1,102,900) $ (36,100) Common stock (400,000) (100,000) Retained earninge 12/31 (1.959,780) (624.000) Total liabilities and equity $(3,462,680) $ (760.100) References a. Which investment method did Patrick use to compute the $381,080 Income from O'Brien? b. Determine the totals to be reported for this business combination for the year ending December 31 c. Verify the total determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31 Equipment fet Goodit Total susta Liabilities Come steek Retained earnings 12/31 Total liabilities and equity 1.110,000 0 $ 1.462.680 5(1,102,100) (400,000) 11.939.101 513,463,680) 326.000 0 1260,100 (36,1001 (190,0001 $20.000 1760.100) 10 a. Which investment method did Patrickuse to compute the $381080 income from O'Brien b. Determine the totals to be reported for this business combination for the year ending December 31 c. Verify the total determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31 Bence Complete this question by entering your answers in the tabs below. Required A Required Required Which investment method did Patrick use to compute the $381,00 income from O'Brien With wet con the 538 DOO Required) 5 Required A Required B Required 10 points Determine the totals to be reported for this business combination for the year ending December 31. (Input all amounts as positive values.) Consolidated totals eBook Print References 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 Trademarks Customer relationships Equipment (net) Goodwill Total assets Llabilities Common stock Retained earnings, 12/31 Total liabilities and equities 5 Complete this question by entering your answers in the tabs below. 10 points Required A Required B Required C eBook Verify the totals determined in part (b) by producing a consolidation worksheet for Patrick and O'Brien for the year ending December 31. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Input all amounts as positive values.) Show less Print References Consolidated Totals PATRICK CORPORATION AND CONSOLIDATED SUBSIDIARY O'BRIEN Consolidation Worksheet For Year Ending December 31 Consolidation Entries Accounts Patrick O'Brien Debit Credit Revenues $ (1.552,500) $ (876,000) Cost of goods sold 414,000 406,000 Depreciation expense 91,200 75,000 Amortization expense 37.600 0 Income from O'Brien (381,080) 0 Net Income $ (1,390,780) $ (395,000) Retained earrings, 1/1 Net Income (above) Dividends declared Retained earnings, 12/31 (728,000) (1,390,780) 159,000 (1.959.780) $ (326,000) (395,000) 97.000 (624,000) $ AS AAR 4 AA Amortization expense Income from O'Brien Not income 91,200 37,600 (381,080) (1,390,780) $ 75,000 0 0 (395.000) 10 points $ Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings 12/31 (728,000) (1.390,780) 159,000 (1.959.780) $ (326,000) (395,000) 97,000 (624000) Book $ Print $ 138,500 56.700 160,000 References Cash Receivables Inventory Investment in O'Brien Trademarks Customer relationships Equipment (net) Goodwill Total assets 233,000 $ 376,000 253,000 926.680 564,000 04 1,110,000 0 3,462,680 $ 78,900 0 326.000 0 760,100 $ Liabilities Common stock Retained earnings (above) Total liabilities and equity (1,102,900) (400.000) (1,959,780) (3.462,680) S (36,100) (100,000) (624,000) (760.100) $