Need help with Req H & Req I
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $360,000 in cash. The subsidiary's stockholders' equity accounts totaled $344,000, and the noncontrolling interest had a fair value of $40,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $17,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (six-year remaining life). Brey reported net income from its own operations of $66,000 in 2019 and $82,000 in 2020. Brey declared dividends of $20,000 in 2019 and $24,000 in 2020. Brey sells inventory to Pitino as follows: Year 2019 2020 2021 Cost to Brey $ 71,000 72,500 93,500 Inventory Remaining at Transfer Price Year-End (at to Pitino transfer price) $ 125,000 $ 27,000 145,000 39,500 170,000 45,000 At December 31, 2021, Pitino owes Brey $18,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2021, and the year then ended. Note: Parentheses indicate a credit balance. Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Net Income Pitino Brey $ (866,000) $ (376,000) 517,000 211,000 185,600 62,000 (84,870). 0 $ (248,270) $(103,000) Expenses Equity in earnings of Brey Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equity 185,600 62,000 (84,870) 0 $ (248, 270) $(103,000) $ (492,000) $(282,000) (248,270) (103,000) 131,000 21,000 $ (609,270) $(364,000) $ 148,000 $ 100,000 265,000 146,000 487,035 0 966,000 330,000 $ 1,866,035 $ 576,000 $ (731,765) $ (46,000) (525,000) (166,000) (609,270) (364,000) $(1,866,035) $(576,000) a. What was the annual amortization resulting from the acquisition-date fair-value allocations? b. Were the intra-entity transfers upstream or downstream? c. What intra-entity gross profit in inventory existed as of January 1, 2021? d. What intra-entity gross profit in inventory existed as of December 31, 2021? e. What amounts make up the $84,870 Equity Earnings of Brey account balance for 2021? f. What is the net income attributable to the noncontrolling interest for 2021? g. What amounts make up the $487,035 Investment in Brey account balance as of December 31, 2021? h. Prepare the 2021 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. i. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies. Complete this question by entering your answers in the tabs below. Req A to D ReqE ReqF ReqG ReqH ReqI No Prepare the 2021 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Transaction Accounts Debit Credit Common stock - Brey 166,000 Retained earnings 609,270 Investment in Brey 403,200 Noncontrolling interest in Brey 44,800 1 1 all amounts as positive values.) Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Consolidated net income Noncontrolling interest in consolidated net income Consolidated net income to Pitino Retained earnings, 1/1/21 Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) Patented technology Total Assets Liabilities Noncontrolling interest in Brey, 12/31/21 Common Stock Retained earnings, 12/31/21 Total liabilities and equity Consolidated Balance $ 1,148,500 $ 635,999 $ 255,800 $ 0 $ 351,270 $ 9,430 $ 248,270 $ 492,000 $ 131,000 $ 609,270 $ 230,000 $ 390,750 $ 0 $ 1,307,900 $ 19,500 $ 1,948,150 $ 759,765 $ 54,115 $ 525,000 609,270 $ 1,948,150 GA Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $360,000 in cash. The subsidiary's stockholders' equity accounts totaled $344,000, and the noncontrolling interest had a fair value of $40,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $17,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (six-year remaining life). Brey reported net income from its own operations of $66,000 in 2019 and $82,000 in 2020. Brey declared dividends of $20,000 in 2019 and $24,000 in 2020. Brey sells inventory to Pitino as follows: Year 2019 2020 2021 Cost to Brey $ 71,000 72,500 93,500 Inventory Remaining at Transfer Price Year-End (at to Pitino transfer price) $ 125,000 $ 27,000 145,000 39,500 170,000 45,000 At December 31, 2021, Pitino owes Brey $18,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2021, and the year then ended. Note: Parentheses indicate a credit balance. Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Net Income Pitino Brey $ (866,000) $ (376,000) 517,000 211,000 185,600 62,000 (84,870). 0 $ (248,270) $(103,000) Expenses Equity in earnings of Brey Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equity 185,600 62,000 (84,870) 0 $ (248, 270) $(103,000) $ (492,000) $(282,000) (248,270) (103,000) 131,000 21,000 $ (609,270) $(364,000) $ 148,000 $ 100,000 265,000 146,000 487,035 0 966,000 330,000 $ 1,866,035 $ 576,000 $ (731,765) $ (46,000) (525,000) (166,000) (609,270) (364,000) $(1,866,035) $(576,000) a. What was the annual amortization resulting from the acquisition-date fair-value allocations? b. Were the intra-entity transfers upstream or downstream? c. What intra-entity gross profit in inventory existed as of January 1, 2021? d. What intra-entity gross profit in inventory existed as of December 31, 2021? e. What amounts make up the $84,870 Equity Earnings of Brey account balance for 2021? f. What is the net income attributable to the noncontrolling interest for 2021? g. What amounts make up the $487,035 Investment in Brey account balance as of December 31, 2021? h. Prepare the 2021 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. i. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies. Complete this question by entering your answers in the tabs below. Req A to D ReqE ReqF ReqG ReqH ReqI No Prepare the 2021 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Transaction Accounts Debit Credit Common stock - Brey 166,000 Retained earnings 609,270 Investment in Brey 403,200 Noncontrolling interest in Brey 44,800 1 1 all amounts as positive values.) Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Consolidated net income Noncontrolling interest in consolidated net income Consolidated net income to Pitino Retained earnings, 1/1/21 Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) Patented technology Total Assets Liabilities Noncontrolling interest in Brey, 12/31/21 Common Stock Retained earnings, 12/31/21 Total liabilities and equity Consolidated Balance $ 1,148,500 $ 635,999 $ 255,800 $ 0 $ 351,270 $ 9,430 $ 248,270 $ 492,000 $ 131,000 $ 609,270 $ 230,000 $ 390,750 $ 0 $ 1,307,900 $ 19,500 $ 1,948,150 $ 759,765 $ 54,115 $ 525,000 609,270 $ 1,948,150 GA
