Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $486,000 in cash. The subsidiary's stockholders' equity accounts totaled $470,000, and the noncontrolling interest had a fair value of $54,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $45,000. 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 $80,000 in 2019 and $96,000 in 2020. Brey declared dividends of $27,000 in 2019 and $31,000 in 2020.

Brey sells inventory to Pitino as follows:

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2019	$	85,000		$	195,000		$	41,000
2020		118,250			215,000			53,000
2021		156,000			240,000			40,000

At December 31, 2021, Pitino owes Brey $32,000 for inventory acquired during the period.

The following separate account balances are for these two companies for December 31, 2021, and the year then ended.

Note: Parentheses indicate a credit balance.

	Pitino				Brey
Sales revenues	$	(894,000	)		$	(446,000	)
Cost of goods sold		531,000				225,000
Expenses		187,000				90,000
Equity in earnings of Brey		(117,090	)			0
Net income	$	(293,090	)		$	(131,000	)
Retained earnings, 1/1/21	$	(520,000	)		$	(310,000	)
Net income (above)		(293,090	)			(131,000	)
Dividends declared		145,000				52,000
Retained earnings, 12/31/21	$	(668,090	)		$	(389,000	)
Cash and receivables	$	162,000			$	114,000
Inventory		335,000				216,000
Investment in Brey		621,675				0
Land, buildings, and equipment (net)		980,000				344,000
Total assets	$	2,098,675			$	674,000
Liabilities	$	(835,585	)		$	(7,000	)
Common stock		(595,000	)			(278,000	)
Retained earnings, 12/31/21		(668,090	)			(389,000	)
Total liabilities and equity	$	(2,098,675	)		$	(674,000	)

1. What was the annual amortization resulting from the acquisition-date fair-value allocations?

2. Were the intra-entity transfers upstream or downstream?

3. What intra-entity gross profit in inventory existed as of January 1, 2021?

4. What intra-entity gross profit in inventory existed as of December 31, 2021?

5. What amounts make up the $117,090 Equity Earnings of Brey account balance for 2021?

6. What is the net income attributable to the noncontrolling interest for 2021?

7. What amounts make up the $621,675 Investment in Brey account balance as of December 31, 2021?

8. Prepare the 2021 worksheet entry to eliminate the subsidiarys beginning owners equity balances.

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