Pitino aoquired 90 percent of Brey's outstanding shares on January 1, 2013, in exchange for $567,000 in cash. The subsidiary's stockholders' equity accounts totaled $551,000 and the noncontrolling interest had a fair value of $63,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $38,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (five-year remaining life) dn Brey reported net income from ts own operations of $89,000 in 2013 and $105,00 in 2014. Brey declared dividends of $31,500 in 2013 and $35,500 in 2014 Brey sells inventory to Pitino as follows: Year 2013 2014 2015 Cost to Brey 94,000 143,000 171,000 Transfer Price to Pitino $240,000 260,000 285,000 at Year-End at transfer price) $ 50,000 62,000 65,000 At December 31, 2015, Pitino owes Brey $41,000 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 Sales revenues Cost of goods sold Expenses Equity in earnings of Brey $ (912,000) $(491,000) 234,000 108,000 0 540,000 187,900 (125,010) Net income (309,110) $(149,000) Retained earnings, 1/1/15 Net income (above) Dividends declared $(538,000) $(328,000) (309,110) (149,000 61,000 154,000 Retained earnings, 12/31/15 S (693,110) $(416,000) Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) S 171,000 $123,000 310,000 0 353,000 380,000 704,700 989,000 Total assets $2,244,700 $ 786,000 Liabilities Common stock Retained earnings, 12/31/15 $ (911,590) $(20,000) (640,000) (350,000) (693,110) (416,000) Total liabilities and equity $(2,244,700) $(786,000)