Bargain Purchase Zeta Corp's net assets have fair values as described below:

	Fair Value
Current assets	$300,000
Land	$800,000
Buildings and equipment	$1,200,000
Loans payable	$(350,000)

Eta Corporation pays $3,300,000 for Zeta Corp and records the acquisition as a merger. Eta Corporation determines that identifiable intangibles valued at $1,700,000, not previously reported on Zeta’s books, are also recognized as acquired assets.

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