On June 30, 2014, Pewter Ltd. gave 28,000 shares to Sterling Co. in exchange for 70% of Sterlings outstanding shares. At the time of the exchange, Pewters shares had a fair value of $22.50 per share. The post-acquisition statements of financial position and Sterlings fair values are shown below.

Statement of Financial Position

As of June 30, 2014

Sterling Co.______

Pewter Ltd. Book value Fair Value

Assets:

Current assets:

Cash $ 750,000 $ 37,500 $ 37,500

Accounts receivable 1,500,000 112,500 112,500

Inventory 150,000 37,500 37,500

2,400,000 187,500

Non-current assets:

Land 750,000 225,000 300,000

Equipment 2,250,000 375,000 412,500

Accumulated amortization (900,000) (112,500)

Investment in Sterling 630,000 __ -___

2,730,000 487,500

Total assets $ 5,130,000 $ 675,000

Liabilities and shareholders equity:

Current liabilities:

Accounts payable $ 750,000 $ 75,000 75,000

Loan payable 300,000 _____

1,050,000 75,000

Shareholders equity:

Common shares 2,580,000 150,000

Retained earnings 1,500,000 450,000

4,080,000 600,000

Total liabilities and shareholders equity $ 5,130,000 $ 675,000

Required: a) Calculate Pewters consolidated goodwill. b) Prepare Pewters consolidated statement of financial position at June 30, 2014 using the entity theory method of consolidation