Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $477,000 in cash. The subsidiary's stockholders' equity accounts totaled $461,000, and the noncontrolling interest had a fair value of $53,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $43,000. 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 $79,000 in 2019 and $95,000 in 2020. Brey declared dividends of $26,500 in 2019 and $30,500 in 2020. Brey sells inventory to Pitino as follows: Transfer Price Year Cost to Brey 2019 $ 84,000 to Pitino $ 190,000 2020 126,000 2021 164,500 210,000 235,000 Inventory Remaining at Year-End (at transfer price) $ 40,000 52,500 70,000 At December 31, 2021, Pitino owes Brey $31,000 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. Sales revenues Cost of goods sold Expenses Equity in earnings of Brey Net income Pitino Brey $ (892,000) $(441,000) 530,000 186,900 224,000 88,000 (106,380) 0 $ (281,480) $(129,000) Retained earnings, 1/1/21 $ (518,000) $(308,000) Net income (above) (281,480) (129,000) Dividends declared 144,000 51,000 Retained earnings, 12/31/21 $ (655,480) $(386,000) Cash and receivables $ 161,000 $ 113,000 Inventory 330,000 Investment in Brey 604,440 | Land, buildings, and equipment (net) 979,000 211,000 0 343,000 Total assets $ 2,074,440 $ 667,000 Liabilities $ (828,960) $ (11,000) Common stock (590,000) (270,000) | Retained earnings, 12/31/21 (655,480) (386,000) Total liabilities and equity $(2,074,440) $(667,000)