Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2022, in exchange for $495,000 in cash. Thesubsidiary's stockholders' equity accounts totaled $479,000, and the noncontrolling interest had a fair value of $55,000 onthat day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $47,000. Pitinoassigned 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 $81,000 in 2022 and $97,000 in 2023. Brey declared dividends of$27,500 in 2022 and $31,500 in 2023.Brey sells inventory to Pitino as follows:Inventory Remainingat Year-End (attransfer price)$ 42,00054,00045,000At December 31, 2024, Pitino owes Brey $33,000 for inventory acquired during the period.The separate account balances for the two companies at December 31, 2024, and the year then ended follow.Note: Parentheses indicate a credit balance.Year202220232024Cost to Brey$ 86,000110,000147,000ItemsSales revenuesCost of goods soldExpensesEquity in earnings of BreyNet incomeTransfer Price toPitino$ 200,000220,000245,000Retained earnings, 1/1/24Net income (above)Dividends declaredLiabilitiesRetained earnings, 12/31/24Cash and receivablesInventoryInvestment in BreyLand, buildings, and equipment (net)Total assetsCommon stock| Retained earnings, 12/31/24ITotal liabilities and equitiesSales revenuesCost of goods soldExpensesEquity in earnings of BreyConsolidated net incomeNoncontrolling interest in consolidated net incomeConsolidated net income to PitinoRetained earnings, 1/1/24Dividends declaredRetained earnings, 12/31/24Cash and receivablesInventoryInvestment in BreyLand, buildings, and equipment (net)Patented technologyTotal AssetsLiabilitiesa. Question: Without preparing a worksheet or consolidation entries, determine theconsolidation balances for these two companies.Noncontrolling interest in Brey, 12/31/24Common StockRetained earnings, 12/31/24Total liabilities and equitiesPitino$ (896,000)532,000187,100(119,970)$ (296,870)$ (522,000)(296,870)146,000$ (672,870)$ 163,000340,000634,410981,000$ 2,118,410$(845,540)(600,000)(672,870)ConsolidatedBalanceS 1,102,000 (S$$ (3,000)(286,000)(392,000)$ (2,118,410) $ (681,000)S$$$$S$$287,8000Brey$(451,000)226,00092,000013,330522,000146,000672,870245,000543,0000$ (133,000)$ (312,000)(133,000)53,000$ (392,000)4,000$ 115,000221,0000345,000$ 681,000

Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2022, in exchange for $495,000 in cash. The subsidiary's stockholders' equity accounts totaled $479,000, and the noncontrolling interest had a fair value of $55,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $47,000. 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 $81,000 in 2022 and $97,000 in 2023. Brey declared dividends of $27,500 in 2022 and $31,500 in 2023. follow

Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2022, in exchange for $495,000 in cash. The subsidiary's stockholders' equity accounts totaled $479,000, and the noncontrolling interest had a fair value of $55,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $47,000. 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 $81,000 in 2022 and $97,000 in 2023. Brey declared dividends of $27,500 in 2022 and $31,500 in 2023. follow

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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