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.

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.

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 subsidiarys beginning owners equity balances.

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

a-d.

e.

f. (Please solve this question)

g. (Please solve this question)

h. (Please solve this question)

i.

Inventory Remaining at Transfer Price Year-End (at to Pitino Year 2016 2017 2018 Cost to Brey 81,000 107,250 132,000 transfer price) 37,000 49,500 55,000 $175,000 195,000 220,000 Inventory Remaining at Transfer Price Year-End (at to Pitino Year 2016 2017 2018 Cost to Brey 81,000 107,250 132,000 transfer price) 37,000 49,500 55,000 $175,000 195,000 220,000