Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $531,000 in cash. The subsidiary's stockholders' equity accounts totaled $515,000 and the noncontrolling interest had a fair value of $59,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $30,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (six-year remaining life).

Brey reported net income from its own operations of $85,000 in 2016 and $101,000 in 2017. Brey declared dividends of $29,500 in 2016 and $33,500 in 2017.

Year	Cost to Brey			Transfer Price to Pitino			Inventory Remaining at Year-End (at transfer price)
2016	$	90,000		$	220,000		$	46,000
2017		132,000			240,000			58,000
2018		145,750			265,000			65,000

At December 31, 2018, Pitino owes Brey $37,000 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	$	(904,000	)		$	(471,000	)
Cost of goods sold		536,000				230,000
Expenses		187,500				100,000
Equity in earnings of Brey		(114,615	)			0
Net income	$	(295,115	)		$	(141,000	)
Retained earnings, 1/1/18	$	(530,000	)		$	(320,000	)
Net income (above)		(295,115	)			(141,000	)
Dividends declared		150,000				57,000
Retained earnings, 12/31/18	$	(675,115	)		$	(404,000	)
Cash and receivables	$	167,000			$	119,000
Inventory		360,000				265,000
Investment in Brey		662,625				0
Land, buildings, and equipment (net)		985,000				349,000
Total assets	$	2,174,625			$	733,000
Liabilities	$	(879,510	)		$	(11,000	)
Common stock		(620,000	)			(318,000	)
Retained earnings, 12/31/18		(675,115	)			(404,000	)
Total liabilities and equity	$	(2,174,625	)		$	(733,000	)

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?

e. What amounts make up the $114,615 Equity Earnings of Brey account balance for 2018?

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

g. What amounts make up the $662,625 Investment in Brey account balance as of December 31, 2018?

h. Prepare the 2018 worksheet entry to eliminate the subsidiarys beginning owners equity balances.

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

Annual amortization

Intra entity transfers

Intra entity gross profit, January 1 2018

Intra entity gross profit , December 31^st 2018

What amounts make up the $114,615 Equity Earnings of Brey account balance for 2018?

Brey reported net income

Excess fair value Amortization

Realized gross profit

Differed 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

Prepare the 2018 worksheet entry to eliminate the subsidiary's beginning owners' equity balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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