Bargain Purchase Gamma Inc.'s net assets have fair values as described below:

	Fair Value
Current assets	$350,000
Land	$700,000
Buildings and equipment	$1,200,000
Loans payable	$(250,000)

Delta Company pays $3,200,000 for Gamma Inc. and records the acquisition as a merger. Delta Company determines that identifiable intangibles valued at $1,700,000, not previously reported on Gamma’s books, are also recognized as acquired assets.

Required: a. Prepare a schedule to calculate the gain on acquisition. b. Prepare Delta’s journal entry to record the merger. c. Now assume Delta determines that Gamma Inc. has unreported contingent liabilities, reportable at the date of acquisition following GAAP, with a fair value of $90,000. Recalculate the gain on acquisition.