Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $396,000 in cash. The subsidiary's stockholders' equity accounts totaled $380,000 and the noncontrolling interest had a fair value of $44,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $25,000. 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 $70,000 in 2016 and $86,000 in 2017. Brey declared dividends of $22,000 in 2016 and $26,000 in 2017 Inventory Remaining at transfer price) 43,500 Transfer Price Year-End (at Cost to Brey Year 2016 2017 2018 to Pitino 145,000 165,000 190,000 $75,000 $ 31,000 82,500 95,000 65,000 At December 31, 2018, Pitino owes Brey $22,000 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 $ (874,000) (396, 000) Cost of goods sold Expenses 521,000 186,000 (80,100 215,000 70,000 Equity in earnings of Brey $ (247,100) $(111,000) $ (500,000) (290,000) (247,100) (111,000) Net income Retained earnings, 1/1/18 Net income (above) Dividends declared 135.000 25,000 $ (612,100) (376, 000) Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Brey $ 152,000 104,000 166,000 285,000 510,975 Land, buildings, and equipment (net)970,000334,000 $ 1,917,975 604,000 $760,875) (30,000) Total assets Liabilities