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Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2013, in exchange for $342,000 in cash. The subsidiary's stockholders' equity accounts totaled $326,000 and the noncontrolling interest had a fair value of $38,000 on that day. However, a building (with a 9-year remaining life) in Brey's accounting records was undervalued by $18,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (6-year remaining life). Brey reported net income from its own operations of $64,000 in 2013 and $80,000 in 2014. Brey declared dividends of $19,000 in 2013 and $23,000 in 2014. Brey sells inventory to Pitino as follows: Inventory Remaining at Year-End Transfer Price Cost to Brey (at transfer price) Year to Pitino $69,000 $25,000 2013 $115,000 37,500 81,000 135,000 2014 160,000 92,800 50,000 2015 At December 31, 2015, Pitino owes Brey $16,000 for inventory acquired during the period