Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $423,000 in cash. The subsidiary's stockholders' equity accounts totaled $407,000 and the noncontrolling interest had a fair value of $47,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $31,000 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 $73,000 in 2016 and $89,000 in 2017. Brey declared dividends of $23,500 in 2016 and $27,500 in 2017 Inventory Remaining at Transfer Price Year-End (at transfer price) 34,000 46,500 40,000 to Pitino Year 2016 2017 2018 Cost to Brey $78,000 90,000 123,000 $ 160,000 180,000 205,000 At December 31, 2018, Pitino owes Brey $25,000 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 $ (880,000) (411,000) Brey Sales revenues Cost of goods sold Expenses Equity in earnings of Brey 218,000 76,000 524,000 186,300 (101,835) Net income Retained earnings, 1/1/18 Net income (above) Dividends declared $ (271,535) (117,000) $ (506,000 (296,000) (271,535) 117,000) 138,000 28,000 Retained earninqs, 12/31/18 $ (639,535) (385, 000)