Pitino acquired 90 percent of Breys outstanding shares on January 1, 2013, in exchange for $477,000 in cash. The subsidiarys stockholders equity accounts totaled $461,000 and the noncontrolling interest had a fair value of $53,000 on that day. However, a building (with a ten-year remaining life) in Breys accounting records was undervalued by $43,000. Pitino assigned the rest of the excess fair value over book value to Breys patented technology (four-year remaining life). Brey reported net income from its own operations of $79,000 in 2013 and $95,000 in 2014. Brey declared dividends of $26,500 in 2013 and $30,500 in 2014. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2013 $ 84,000 $ 190,000 $ 40,000 2014 126,000 210,000 52,500 2015 164,500 235,000 70,000 At December 31, 2015, Pitino owes Brey $31,000 for inventory acquired during the period. The following separate account balances are for these two companies for December 31, 2015, and the year then ended. Note: Parentheses indicate a credit balance. Pitino Brey Sales revenues $ (892,000 ) $ (441,000 ) Cost of goods sold 530,000 224,000 Expenses 186,900 88,000 Equity in earnings of Brey (106,380 ) 0 Net income $ (281,480 ) $ (129,000 ) Retained earnings, 1/1/15 $ (518,000 ) $ (308,000 ) Net income (above) (281,480 ) (129,000 ) Dividends declared 144,000 51,000 Retained earnings, 12/31/15 $ (655,480 ) $ (386,000 ) Cash and receivables $ 161,000 $ 113,000 Inventory 330,000 211,000 Investment in Brey 604,440 0 Land, buildings, and equipment (net) 979,000 343,000 Total assets $ 2,074,440 $ 667,000 Liabilities $ (828,960 ) $ (11,000 ) Common stock (590,000 ) (270,000 ) Retained earnings, 12/31/15 (655,480 ) (386,000 ) Total liabilities and equity $ (2,074,440 ) $ (667,000 ) a. What was the annual amortization resulting from the acquisition-date fair-value allocations? b. Were the intra-entity transfers upstream or downstream? Upstream Downstream c. What unrealized gross profit existed as of January 1, 2015? d. What unrealized gross profit existed as of December 31, 2015? e. What amounts make up the $106,380 equity earnings of Brey account balance for 2015?