On January 1, 2014, Peregrine Corporation acquired 100 percent of the voting stock of Osprey Corporation in exchange for $2,017,000 in cash and securities. On the acquisition date, Osprey had the following balance sheet:

At the acquisition date, the carrying amounts of Osprey’s assets and liabilities were generally equivalent to their fair values except for the following assets:

During the next two years, Osprey has the following income and dividends in its own separately prepared financial reports to its parent.

Dividends are declared and paid in the same period. The December 31, 2015, separate financial statements for each company appear below. Parentheses indicate credit balances.

a. Prepare Peregrine’s acquisition-date fair-value allocation schedule for its investment in Osprey.
b. Show how Peregrine determined its December 31, 2015, Investment in Osprey balance.
c. Prepare a worksheet to determine the balances for Peregrine’s December 31, 2015, consolidated financial statements.

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$ 23,000 Acounts payable 97,000 Long-term debt $ 57,000 993,000 as Accounts receivable Inventory Equipment (net) Trademarks 140,000 1,490,000 850,000 $2,600,000 Common stock Retained earnings 800,000 750,000 $2,600,000 Remaining Useful Life Asset Book Value Fair Value $1,490,000 1, Equipment Customer lists Trademarks $1,610,000 160,000 900,000 8 years 4 years indefinite 850,000 Net Income Dividends 2014 2015 $175,000 378,000 $25,000 45,000 Income Statement Peregrine Osprey Revenues Cost of goods sold Depreciation Amortization Equity earnings in Osprey $ (4,200,000) $2,200,000) 1,550,000 272,000 2,300,000 493,000 105,000 (323,000) (1,625,000) Net income (378,000) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared (2,900,000) (900,000) (378,000) 45,000 (1,625,000) 150,000 Retained earnings 12/31 S (4,375,000) (1,233,000) Balance Sheet Cash Accounts receivable Inventory Investment in Osprey Equipment Customer lists Trademarks Goodwill S 430,000 690,000 890,000 2,390,000 6,000,000 115,000 2,500,000 185,000 13,200,000 $88,000 75,000 420,000 1,400,000 850,000 2,833,000 Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31 $ (500,000) $(75,000) (725,000) (800,000) (1,233,000) $(13,200,000) 2,833,000X (1,325,000) (7,000,000) (4.375,000) Total liabilities and equity