Theory: Bargain Purchase Element Pinkie Inc. recently acquired 100% of Sinkle Inc.’s assets at an amount below their current value. The controller has listed the following ways to account for the bargain purchase element:

1. Credit it to income in the year of the acquisition, possibly classified as an extraordinary item.

2. Amortize it to income over the two-year period needed to turn the acquired operation into a profit-making operation.

3. Allocate it to the acquired assets based on relative current values, thereby lowering the recorded values of these items.

4. Credit it to contributed capital.

Required Evaluate the theoretical soundness of each alternative regardless of the requirements of FAS 141.