Pitino acquired 80 percent of Brey's outstanding shares on January 1, 2019, in exchange for $369,000 in cash. The subsidiary's stockholders' equity accounts totaled $353,000, and the noncontrolling interest had a fair value of $92,250 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $19,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (five-year remaining life).

Brey reported net income from its own operations of $67,000 in2019 and $83,000 in 2020. Brey declared dividends of $18,000 in2019 and $22,000 in 2020.

Brey sells inventory to Pitino as follows:

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2019	$	72,000		$	130,000		$	28,000
2020		97,500			150,000			40,500
2021		87,500			175,000			50,000

At December 31, 2021, Pitino owes Brey $19,000 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.

	Pitino				Brey
Sales revenues	$	(868,000	)		$	(381,000	)
Cost of goods sold		518,000				212,000
Expenses		185,700				64,000
Equity in earnings of Brey		(59,540	)			0
Net income	$	(223,840	)		$	(105,000	)
Retained earnings, 1/1/21	$	(494,000	)		$	(284,000	)
Net income (above)		(223,840	)			(105,000	)
Dividends declared		132,000				22,000
Retained earnings, 12/31/21	$	(585,840	)		$	(367,000	)
Cash and receivables	$	149,000			$	101,000
Inventory		270,000				151,000
Investment in Brey		456,000				0
Land, buildings, and equipment (net)		967,000				331,000
Total assets	$	1,842,000			$	583,000
Liabilities	$	(726,160	)		$	(37,000	)
Common stock		(530,000	)			(179,000	)
Retained earnings, 12/31/21		(585,840	)			(367,000	)
Total liabilities and equity	$	(1,842,000	)		$	(583,000	)

1. What was the annual amortization resulting from the acquisition-date fair-value allocations?

2. Were the intra-entity transfers upstream or downstream?

3. What intra-entity gross profit in inventory existed as of January 1, 2021?

4. What intra-entity gross profit in inventory existed as of December 31, 2021?

5. What amounts make up the $59,540 Equity Earnings of Brey account balance for 2021?

6. What is the net income attributable to the noncontrolling interest for 2021?

7. What amounts make up the $456,000 Investment in Brey account balance as of December 31, 2021?

8. Prepare the 2021 worksheet entry to eliminate the subsidiary’s beginning owners’ equity balances.

9. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies.