Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $432,000 in cash. The subsidiary's stockholders' equity accounts totaled $416,000, and the noncontrolling interest had a fair value of $48,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $33,000. 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 $74,000 in 2019 and $90,000 in 2020. Brey declared dividends of $24,000 in 2019 and $28,000 in 2020. Brey sells inventory to Pitino as follows: Transfer Price Year Cost to Brey 2019 $ 79,000 2020 2021 111,000 115,500 to Pitino $ 165,000 185,000 210,000 Inventory Remaining at Year-End (at transfer price) $ 35,000 47,500 45,000 At December 31, 2021, Pitino owes Brey $26,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2021, and the year then ended. Note: Parentheses indicate a credit balance. Pitino Brey Sales revenues $ (882,000) $(416,000) Cost of goods sold 525,000 Expenses 186,400 Equity in earnings of Brey (97,425) 219,000 78,000 0 Net income $ (268,025) $(119,000) Retained earnings, 1/1/21 $ (508,000) $(298,000) Net income (above) (268,025) (119,000) Dividends declared 139,000 29,000 Retained earnings, 12/31/21 $ (637,025) $(388,000) Cash and receivables $ 156,000 $ 108,000 Inventory 305,000 186,000 Investment in Brey 569,925 0 Land, buildings, and equipment (net) 974,000 338,000 Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equity $ 2,004,925 $ 632,000 $ (802,900) $ (14,000) (565,000) (230,000) (637,025) (388,000) $(2,004,925) $(632,000)