Purchase Peregrine Company acquired 80 percentage of Sparrow Company's common stock on June 30, 2014, for $22,000,000 in cash; fees paid to an outside firm to estimate the earning power of Sparrow and the fair values of its properties amounted to $3,000,00(1 Book value of Sparrow's net assets was $25,000,000. Book values of Sparrow's identifiable assets and liabilities approximated their fair values except as noted below:

Assume that the fair values above have been carefully evaluated for accuracy. The fair value of the non-controlling interest is estimated to be $4,000,000 at the date of acquisition.
Required
a. Calculate the gain on acquisition and prepare Peregrine's acquisition entry.
b. Prepare the working paper eliminating entries needed to consolidate Peregrine and Sparrow on June 30, 2014.

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Book Value Fair Value $1,000,000 Other plant assets, net..*...^^6,000,000 .. 2,000,000 $ 200,000 8,000,000 3,500,000 4,700,000 Land Investments