Carson Palmer and Watson Brown each have two last names,
Larry Ned and Mike Scott each have two first names.
They agree to a trade where each of them will end up with one first name and one last name.
After the trade, Ned Brown immediately left to have his car repaired. The other three men chatted for a bit.
Larry made a joke that Mr. Watson laughed at.
Scott and Mr. Carson discussed what dance clubs had the hottest women.
Mike suggested to Mr. Palmer that he should claim he's related to Arnold.
Larry told Mike that if Scott had done things differently, Scott's new initials would have formed one of the eight standard compass points.
What is Larry's new last name?
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Larry is not Mr. Watson.
Scott is not Mr. Carson
Mike is not Mr. Palmer.
And Scott's initials are not "SW", so Scott is not Mr. Watson. Therefore, Scott is Mr. Palmer.
Thus, Larry is not Mr. Palmer. He's also not Mr. Watson, so he must be Mr. Carson.
The complete set: Ned Brown, Larry Carson, Scott Palmer, Mike Watson.