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

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

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

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 19P

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Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, 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 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 2019 and $80,000 in 2020. Brey declared dividends of $19,000 in 2019 and $23,000 in 2020. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 69,000 $ 115,000 $ 25,000 2020 81,000 135,000 37,500 2021 92,800 160,000 50,000 At December 31, 2021, Pitino owes Brey $16,000 for inventory acquired during the…
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, 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 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 2019 and $80,000 in 2020. Brey declared dividends of $19,000 in 2019 and $23,000 in 2020. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 69,000 $ 115,000 $ 25,000 2020 81,000 135,000 37,500 2021 92,800 160,000 50,000 At December 31, 2021, Pitino owes Brey $16,000 for inventory acquired during the…
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, 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 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 2019 and $80,000 in 2020. Brey declared dividends of $19,000 in 2019 and $23,000 in 2020. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 69,000 $ 115,000 $ 25,000 2020 81,000 135,000 37,500 2021 92,800 160,000 50,000 At December 31, 2021, Pitino owes Brey $16,000 for inventory acquired during the…
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $486,000 in cash. The subsidiary's stockholders' equity accounts totaled $470,000, and the noncontrolling interest had a fair value of $54,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $45,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). Brey reported net income from its own operations of $80,000 in 2019 and $96,000 in 2020. Brey declared dividends of $27,000 in 2019 and $31,000 in 2020. Brey sells inventory to Pitino as follows: Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 85,000 $ 195,000 $ 41,000 2020 118,250 215,000 53,000 2021 156,000 240,000 40,000 At December 31, 2021, Pitino owes Brey $32,000 for inventory acquired during the…
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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 noncontrolling 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…
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