Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $423,000 in cash. The subsidiary's stockholders' equity accounts totaled $407000 and the noncontrolling interest had a fair value of $47,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $31,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). 10 points Brey reported net income from its own operations of $73,000 in 2016 and $89,000 in 2017. Brey declared dividends of $23,500 in 2016 and $27,500 in 2017 Inventory eBook Remaining at transfer price) 46,580 Transfer Price Year-End (at YearCost to Breyto Pitino 2016 2817 2018 $ 78,000 90,800 123,e00 5 160,000 188,90e 205,000 $ 34,000 Print 40,000 At December 31, 2018, Pitino owes Brey $25,000 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 Cost of goods sold Expenses Equity in carnings of Brey $ (880,8) (411,000) 218,000 76,003 524,808 186,380 101,835 $ (271,535) $ (117,000) 5 (586,8) (296,000) (271,535) (117,800) Net income Retained carnings, 1/1/18 Net income (above) Dividends declared 133, 28,908 Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) $ (639,535) $ (385,003) $ 155,000 107,900 181,003 337,000 $ 1,986,630 625,900 S (787,095) (18,000) 300.000 558,630 973,800 Total assets Liabilities Common stock Retained earnings, 12/31/18 (560,8e) (222,900) (639,535 385,88) Total liabilities and equity $ (1,986,63) (625,00)