On January 1, 2014, Peregrine Corporation acquired 100% 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:

Cash	$	23,000	Accounts payable	$	57,000
Accounts receivable		97,000	Long-term debt		993,000
Inventory		140,000
Equipment (net)		1,490,000	Common stock		800,000
Trademarks		850,000	Retained earnings		750,000
	$	2,600,000		$	2,600,000

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

Asset	Book Value		Fair Value		Remaining Useful Life
Equipment	$	1,490,000	$	1,610,000	8 years
Customer lists		0		160,000	4 years
Trademarks		850,000		900,000	indefinite

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

	Net Income		Dividends
2014	$	175,000	$	25,000
2015		378,000		45,000

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.

		Peregrine				Osprey
Income Statement
Revenues		$	(4,200,000	)		$	(2,200,000	)
Cost of goods sold			2,300,000				1,550,000
Depreciation			493,000				272,000
Amortization			105,000				0
Equity earnings in Osprey			(323,000	)			0
Net income		$	(1,625,000	)		$	(378,000	)
Statement of Retained Earnings
Retained earnings, 1/1		$	(2,900,000	)		$	(900,000	)
Net income (above)			(1,625,000	)			(378,000	)
Dividends declared			150,000				45,000
Retained earnings, 12/31		$	(4,375,000	)		$	(1,233,000	)
Balance Sheet
Cash		$	430,000			$	88,000
Accounts receivable			690,000				75,000
Inventory			890,000				420,000
Investment in Osprey			2,390,000				0
Equipment			6,000,000				1,400,000
Customer lists			115,000				0
Trademarks			2,500,000				850,000
Goodwill			185,000				0
Total assets		$	13,200,000			$	2,833,000
Accounts payable		$	(500,000	)		$	(75,000	)
Long-term debt			(1,325,000	)			(725,000	)
Common stock			(7,000,000	)			(800,000	)
Retained earnings, 12/31			(4,375,000	)			(1,233,000	)
Total liabilities and equity		$	(13,200,000	)		$	(2,833,000	)

Note: Parentheses indicate a credit balance.

a.

Determine the fair value in excess of book value for Peregrine's acquisition date investment in Osprey.

.

b. Determine Peregrine's December 31, 2015, Investment in Osprey balance.

c.

Prepare a worksheet to determine the balances for Peregrines December 31, 2015, consolidated financial statements. (For accounts where multiple consolidation entries are required,combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)