Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, 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. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). NUMBER 9 ONLY PLEASE

Brey reported net income from its own operations of $82,000 in 2016 and $98,000 in 2017. Brey declared dividends of $28,000 in 2016 and $32,000 in 2017.

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2016	$	87,000		$	205,000		$	43,000
2017		146,250			225,000			55,000
2018		137,500			250,000			50,000

At December 31, 2018, Pitino owes Brey $34,000 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	$	(898,000	)		$	(456,000	)
Cost of goods sold		533,000				227,000
Expenses		187,200				94,000
Equity in earnings of Brey		(108,990	)			0
Net income	$	(286,790	)		$	(135,000	)
Retained earnings, 1/1/18	$	(524,000	)		$	(314,000	)
Net income (above)		(286,790	)			(135,000	)
Dividends declared		147,000				54,000
Retained earnings, 12/31/18	$	(663,790	)		$	(395,000	)
Cash and receivables	$	164,000			$	116,000
Inventory		345,000				250,000
Investment in Brey		635,895				0
Land, buildings, and equipment (net)		982,000				346,000
Total assets	$	2,126,895			$	712,000
Liabilities	$	(858,105	)		$	(23,000	)
Common stock		(605,000	)			(294,000	)
Retained earnings, 12/31/18		(663,790	)			(395,000	)
Total liabilities and equity	$	(2,126,895	)		$	(712,000	)

1. What was the annual amortization resulting from the acquisition-date fair-value allocations?

2. Were the intra-entity transfers upstream or downstream?

3. What intra-entity gross profit in inventory existed as of January 1, 2018?

4. What intra-entity gross profit in inventory existed as of December 31, 2018?

5. What amounts make up the $108,990 Equity Earnings of Brey account balance for 2018?

6. What is the net income attributable to the noncontrolling interest for 2018?

7. What amounts make up the $635,895 Investment in Brey account balance as of December 31, 2018?

8. Prepare the 2018 worksheet entry to eliminate the subsidiarys beginning owners equity balances.

9. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies.