Gain on bargain purchase = $45,000

1. Prepare Power's entry costs related to acquisition of Sark. (Gain on bargain purchase = $45,000)

2. Prepare Power's entry to record the acquisition on Sark.

Power Company purchased Sark Corporation's net assets on January 3, 20X2, for $625,000 cash. In addition, Power incurred $5,000 of direct costs in consummating the combination. At the time of acquisition, Sark reported the following historical cost and current market data: Book Value Fair Value $ 50,000 100,000 200,000 Balance Sheet Item Cash & Receivables Inventory Buildings & Equipment (net) Patent Total Assets Accounts Payable Common Stock Additional Paid-In Capital $ 50,000 150,000 300,000 200,000 $700,000 $ 30,000 $350,000 $ 30,000 100,000 Retained Earnings 80,000 140,000 $350,000 Total Liabilities & Equities Required Give the journal entry or entries with which Power recorded its acquisition of Sark's net assets