pany acquired 80 percent of Sparrow Company's common stock for $20,000,000 in cash; fees paid to an outside firm to estimate the earninsg power of Sparrow and the fair values of its properties amounted to $2,500,000. Sparrow's equity consisted of $3,000,000 in capital stock, $25,000,000 in retained earnings, $1,500,000 in accumulated other comprehensive loss, and $500,000 in treasury stock. Book values of Sparrow's identifiable assets and liabilities approximated their fair values except as noted below: beneficiary Fair value Book value $1,000,000 6,000,000 $ 300,000 Land 4,000,000 Other plant assets, net. Identifiable intangible assets 3,000,000 booo 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 Calculate the gain on acquisition and prepare Peregrine's acquisition entry b. Prepare the working paper eliminating entries needed to consolidate Peregrine and Sparrow at the date of acquisition. a