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).

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
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	)

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?

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Annual amortization
Intra-entity transfers
Intra-entity gross profit, January 1, 2018
Intra-entity gross profit, December 31, 2018

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

Breys reported net income
Excess fair value amortization
Realized gross profit
Deferred gross profit
Adjusted subsidiary net income
Ownership		%
Equity in earnings of Brey

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

Net income attributable to noncontrolling interest

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

Investment in Brey (consideration transferred)
Net income of Brey
Reported 2016
2017
2018
Total
Intra-entity gross profit, 12/31/18
Adjusted net income 2016-2018
Pitinos ownership		%
Excess amortizations
Dividends declared by Brey
2016
2017
2018
Total
Pitino's ownership		%
Investment in Brey, 12/31/18

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

	Consolidated Balance
Sales revenues
Cost of goods sold
Expenses
Equity in earnings of Brey
Noncontrolling interest in consolidated net income
Consolidated net income to parent
Retained earnings, 1/1
Dividends declared
Retained earnings, 12/31
Cash and receivables
Inventory
Investment in Brey
Land, buildings, and equipment
Patented technology
Total Assets
Liabilities
Noncontrolling interest in Brey, 12/31
Common Stock
Retained earnings, 12/31
Total liabilities and stockholders' equity