Pitino acquired 80 percent of Brey's outstanding shares on January 1, 2016, in exchange for $320,000 in cash. The subsidiary's stockholders' equity accounts totaled $304,000 and the noncontrolling interest had a fair value of $80,000 on that day. However, a building (with a eight-year remaining life) in Brey's accounting records was undervalued by $37,000. 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 $76,000 in 2016 and $92,000 in 2017. Brey declared dividends of $25,000 in 2016 and $29,000 in 2017. Year 2016 2017 2018 Cost to Brey $ 81,000 107,250 132,000 Transfer Price to Pitino $ 175,000 195,000 220,000 Inventory Remaining at Year-End (at transfer price) $ 37,000 49,500 55,000 At December 31, 2018, Pitino owes Brey $28,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2018, 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 Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equity Pitino Brey $ (886,000) $ (426,000) 527,000 186,600 (85,480) 221,000 82,000 0 $ (257,880) $ (512,000) (257,880) 141,000 (628,880) $ (394,000) $ 110,000 196,000 0 340,000 $ 646,000 $ (136,000) (116,000) (394,000) $(1,876,780) $ (646,000) $ $ $ (123,000) $ (302,000) (123,000) 31,000 158,000 315,000 427,780 976,000 $ 1,876,780 $ (672,900) (575,000) (628,880) 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, 2018? d. What intra-entity gross profit in inventory existed as of December 31, 2018? e. What amounts make up the $85,480 Equity Earnings of Brey account balance for 2018? f. What is the net income attributable to the noncontrolling interest for 2018? g. What amounts make up the $427,780 Investment in Brey account balance as of December 31, 2018? h. Prepare the 2018 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. 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, 2018? d. What intra-entity gross profit in inventory existed as of December 31, 2018? Annual amortization Intra-entity transfers Intra-entity gross profit, January 1, 2018 Intra-entity gross profit, December 31, 2018 $ 16,425 Upstream $ 22,275 $ 22,000 What amounts make up the $427,780 Investment in Brey account balance as of December 31, 2018? Investment in Brey (consideration transferred) Net income of Brey Reported 2016 2017 2018 Total Intra-entity gross profit, 12/31/18 Adjusted net income 2016-2018 Pitino's ownership Excess amortizations Dividends declared by Brey 2016 2017 2018 Total Pitino's ownership Investment in Brey, 12/31/18 0 0 80 % 0 80 % 69 No 1 Transaction 1 Accounts Common stock - Brey Retained earnings Investment in Brey Noncontrolling interest in Brey Debit Credit Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies. Consolidated Balance Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Noncontrolling interest in consolidated net income Consolidated net income to parent Retained earnings, 1/1 Dividends declared Retained earnings, 12/31 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment Patented technology Total Assets Liabilities Noncontrolling interest in Brey, 12/31 Common Stock Retained earnings, 12/31 Total liabilities and stockholders' equity $ 1,092,000 IS 527,725 285,025 0 $ $ $ $ $ $ $ 69 $ $ IS $ $ $ $ $ $ 21,370 257,880 512,000 141,000 628,880 240,000 489,000 0 1,339,125 23,600 2,091,725 780,900 106,945 575,000 628,880 2,091,725