Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $342,000 in cash. The subsidiary's stockholders' equity accounts totaled $326,000 and the non-controlling interest had a fair value of $38,000 on that day. However, a building (with a nine-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 (six-year remaining life).

Brey reported net income from its own operations of $64,000 in 2016 and $80,000 in 2017. Brey declared dividends of $19,000 in 2016 and $23,000 in 2017.

Brey sells inventory to Pitino as follows:

At December 31, 2018, Pitino owes Brey $16,000 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. Credits are indicated by parentheses.

Answer each of the following questions:
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 $68,400 Equity Earnings of Brey account balance for 2018?
f. What is the net income attributable to the non-controlling interest for 2018?
g. What amounts make up the $450,000 Investment in Brey account balance as of December 31, 2018?
h. Prepare the 2018 worksheet entry to eliminate the subsidiary's beginning owners' equity balances.
i. Without preparing a worksheet or consolidation entries, determine the consolidation balances for these two companies.

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Inventory Remaining at Year-End (at transfer price) $25,000 37,500 50,000 Transfer Price Year 2016 2017 2018 Cost to Brey $69,000 81,000 92,800 $115,000 135,000 160,000 Pitino Brey Sales revenues Cost of goods sold Expenses Equity in earnings of Brey $ (862,000) $(366,000) 209,000 67,000 515,000 185,400 (68.400 $(230,000) (90,000 $ (488,000) $(278,000) (90,000) 27,000 Net income Retained earnings, 1/1/18 Net income (above) Dividends declared (230,000) 136,000 $(582,000) $146,000 255,000 450,000 964,000 $1,815,000 Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Brey Land, buildings, and equipment (net) $341.000) $ 98,000 136,000 328,000 $562,000 Total assets Liabilities Common stock Retained earnings, 12/31/18 $ (718,000) (71,000) (150,000) (582.000 341,000) (515,000) Total liabilities and equities 1,815 $(562