On October 1, 2020 Phoenix Ltd. paid $337,500 for 75% of the issued and outstanding common shares of Senators Corp. The recorded assets and liabilities of Senators Corp. on October 1, 2020 were:

Cash $ 165,000

Inventory 125,000

Property and equipment $600,000

Accum. Amortization $200,000 400,000

Goodwill 35,000

Total Assets $725,000

Current Liabilities $ 85,000

Long Term Liabilities 115,000

Common Shares 225,000

Retained Earnings 300,000

Total Liabilities & Equity $725,000

On October 1, 2020, Senators Corp. inventory had a fair value of $130,000, and the property and equipment (net) had a fair value of $450,000 and Long Term Liabilities had a fair value of $118,000. The business combination agreement stated that if Senators earnings exceed $2.50 per share in the next 2 years an additional payment equal to $50,000 would be paid to Senators shareholders. An actuary valued this a as equivalent to $37,500 if paid at acquisition date.

REQUIRED: SHOW ALL CALCULATIONS

a) Calculate the amount of goodwill resulting from the business combination using the entity theory.

b) Calculate the non-controlling interest at acquisition date using the entity theory Fair Value Enterprise (FVE).