Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $405,000 in cash. The subsidiary's stockholders' equity accounts totaled $389,000 and the noncontrolling interest had a fair value of $45,000 on that day. However, a building (with a nine-year remaining life) in Brey's accounting records was undervalued by $27,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life).

Brey reported net income from its own operations of $71,000 in 2016 and $87,000 in 2017. Brey declared dividends of $22,500 in 2016 and $26,500 in 2017.

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2016	$	76,000		$	150,000		$	32,000
2017		102,000			170,000			44,500
2018		126,750			195,000			70,000

At December 31, 2018, Pitino owes Brey $23,000 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.

	Pitino				Brey
Sales revenues	$	(876,000	)		$	(401,000	)
Cost of goods sold		522,000				216,000
Expenses		186,100				72,000
Equity in earnings of Brey		(85,320	)			0
Net income	$	(253,220	)		$	(113,000	)
Retained earnings, 1/1/18	$	(502,000	)		$	(292,000	)
Net income (above)		(253,220	)			(113,000	)
Dividends declared		136,000				26,000
Retained earnings, 12/31/18	$	(619,220	)		$	(379,000	)
Cash and receivables	$	153,000			$	105,000
Inventory		290,000				171,000
Investment in Brey		528,300				0
Land, buildings, and equipment (net)		971,000				335,000
Total assets	$	1,942,300			$	611,000
Liabilities	$	(773,080	)		$	(26,000	)
Common stock		(550,000	)			(206,000	)
Retained earnings, 12/31/18		(619,220	)			(379,000	)
Total liabilities and equity	$	(1,942,300	)		$	(611,000	)

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, 2018?

d.What intra-entity gross profit in inventory existed as of December 31, 2018?

e.What amounts make up the $85,320 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 $528,300 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.