Bargain Purchase Omega Ltd's net assets have fair values as described below:

	Fair Value
Current assets	$400,000
Land	$800,000
Buildings and equipment	$1,200,000
Loans payable	$(300,000)

Alpha Company pays $3,200,000 for Omega Ltd and records the acquisition as a merger. Alpha Company determines that identifiable intangibles valued at $1,600,000, not previously reported on Omega’s books, are also recognized as acquired assets.

Required: a. Prepare a schedule to calculate the gain on acquisition. b. Prepare Alpha’s journal entry to record the merger. c. Now assume Alpha determines that Omega Ltd has unreported contingent liabilities, reportable at the date of acquisition following GAAP, with a fair value of $85,000. Recalculate the gain on acquisition.