Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $504,000 in cash. The subsidiary's stockholders' equity accounts totaled $488,000, and the noncontrolling interest had a fair value of $56,000 on that day. However, a building (with a ten year remaining life) in Brey's accounting records was undervalued by $49,000. Potino 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 $82,000 in 2019 and $98,000 in 2020. Brey declared dividends of $28,000 in 2019 and $32,000 in 2020 Brey sells inventory to Pitino as follows Year 2019 2020 2021 Cost to Brey $ 87,600 146,250 137,500 Transfer Price to Pitino 5 205,000 225,000 250,000 Inventory Remaining at Year-End (at transfer price) $ 43,000 55,000 50,000 At December 31, 2021, Pitino owes Brey $34,000 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 Retained earnings, 1/1/21 Net Income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment In Grey Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total Habilities and equity Pitino Brey 5 (898,000) $ (456,000) 533,000 227,000 187,200 94,080 (108.990) $(286,790) $(135,000) $ (524,000) $ (314,000) (286,790) (135,000) 147,000 54,000 $ (669,790) $ (395,000) $ 164,000 116,000 345,000 250,000 635,895 e 982, eee 346,000 5.2, 126,895 $ 712,000 5 (858,105) 5 (23,000) (605,000 (294,600) (663, 290) (395,000 5(2,126,895) 5(712,000) 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, 2021? d. What intra-entity gross profit in inventory existed as of December 31, 2021? e. What amounts make up the $108,990 Equity Earnings of Brey account balance for 2021? f. What is the net income attributable to the noncontrolling interest for 2021? g. What amounts make up the $635,895 Investment in Brey account balance as of December 31, 2021? h. Prepare the 2021 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. 1. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies Complete this question by entering your answers in the tabs below. W Reg A to D Red E Reg F Req G ReqH Reg! What amounts make up the $635,895 Investment in Brey account balance as of December 31, 2021? Investment in Brey (consideration transferred) Net Income of Brey %
