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
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 Revenue	(876,000)	(401,000)
COGS	522,000	216,000
Expenses	186,1000	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)

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, 2018?

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

5. What amounts make up the $85,320 Equity Earnings of Brey account balance for 2018?

6. What is the net income attributable to the noncontrolling interest for 2018?

7. What amounts make up the $528,300 Investment in Brey account balance as of December 31, 2018?

8. Prepare the 2018 worksheet entry to eliminate the subsidiarys beginning owners equity balances.

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