Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $378,000 in cash. The subsidiary's stockholders' equity accounts totaled $362,000, and the noncontrolling interest had a fair value of $42,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $21,000. 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 $68,000 in 2019 and $84,000 in 2020. Brey declared dividends of $21,000 in 2019 and $25,000 in 2020. Brey sells inventory to Pitino as follows: Year 2019 2020 2021 Cost to Brey $ 73,000 93,000 108,000 Transfer Price to Pitino $ 135,000 155,000 180,000 Inventory Remaining at Year-End (at transfer price) $ 29,000 41,500 55,000 At December 31, 2021, Pitino owes Brey $20,000 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 Brey Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equity $ (870,000) $ (386,000) 519,000 213,000 185,800 66,000 (82,890) 0 $ (248,090) $ (107,000) $ (496,000) $ (286,000) (248,090) (107,000) 133,000 23,000 $ (611,090) $ (370,000) $ 150,000 $ 102,000 275,000 156,000 503,550 0 968,000 332,000 $ 1,896,550 $ 590,000 $ (750, 460) $ (38,000) (535,000) (182,000) (611,090) (370,000) $(1,896,550) $ (590,000) 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 $82,890 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 $503,550 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. i. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies
