Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, 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 2016 and $84,000 in 2017. Brey declared dividends of $21,000 in 2016 and $25,000 in 2017.

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2016	$	73,000		$	135,000		$	29,000
2017		93,000			155,000			41,500
2018		108,000			180,000			55,000

At December 31, 2018, Pitino owes Brey $20,000 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	$	(870,000	)		$	(386,000	)
Cost of goods sold		519,000				213,000
Expenses		185,800				66,000
Equity in earnings of Brey		(82,890	)			0
Net income	$	(248,090	)		$	(107,000	)
Retained earnings, 1/1/18	$	(496,000	)		$	(286,000	)
Net income (above)		(248,090	)			(107,000	)
Dividends declared		133,000				23,000
Retained earnings, 12/31/18	$	(611,090	)		$	(370,000	)
Cash and receivables	$	150,000			$	102,000
Inventory		275,000				156,000
Investment in Brey		503,550				0
Land, buildings, and equipment (net)		968,000				332,000
Total assets	$	1,896,550			$	590,000
Liabilities	$	(750,460	)		$	(38,000	)
Common stock		(535,000	)			(182,000	)
Retained earnings, 12/31/18		(611,090	)			(370,000	)
Total liabilities and equity	$	(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, 2018? d. What intra-entity gross profit in inventory existed as of December 31, 2018

e.What amounts make up the $82,890 Equity Earnings of Brey account balance for 2018?

Brey's Reported Net Income
Excess Fair Value Amortization
Realized Gross Profits
Deferred Gross Profits
Adjusted Subsidiary Net Income
Ownership %
Equity in earnings of Brey

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

G.What amounts make up the $503,550 Investment in Brey account balance as of December 31, 2018?

H.Prepare the 2018 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

Sales Revenue
Cost of Goods Sold
Expenses
Equity in Earnings of Brey
Nonconsolidating interest inconsolidated Net Income
Consolidated NI to Parent
Retained Earnings, 1/1
Dividends Declared
Retained Earnings, 12/31
Cash and Receivables
Inventory
Interest In Brey
Land, Buildings, and equiptment
Patend Technology
Total Assets
Liabilities
Noncontrolling Interest in Brey, 12/31
Common Stock
Retained Earnings 12/31
Total Liabilities and Stockholders equity