hi

I have this solution but I don't understand may someone help please.

POPCORN Corporation acquired an80 %interest in the outstanding stock of SALT Corporation for $520,000 on1/1/X1. At this time, the stockholders' equity of SALT consisted of $400,000 of capital stock and $50,000 of retained earnings. The following table representsonlythose assets and liabilities of Salt which had book values different than their fair values at the date of acquisition:

	Book Value	Fair Value
Inventory	$ 20,000	$ 15,000	Sold X1
Land	30,000	40,000	Still owned
Buildings	10,000	50,000	Remaining life 5 years
Notes Payable	(50,000)	(40,000)	Matures on 12/31/X4

Comparative Balance Sheets for POPCORN and SALTAT 12/31/X3are presented here:

	Popcorn	Salt
Assets:
Other Assets	$318,000	$100,000
Inventory	100,000	50,000
Land	500,000	100,000
Buildings-net	1,500,000	580,000
Investment in Salt	658,800
Dividends Receivable	24,000
Advance Receivable from P		10,000
Total Assets	$3,100,800	$840,000
Liabilities & Equity:
Other Liabilities (includes notes pay)	$500,000	$160,000
Dividends Payable		30,000
Advance Payable to Salt	10,000
Capital Stock	2,000,000	400,000
Retained Earnings	590,800	250,000
Total Liabilities and Equity	$3,100,800	$840,000

1.Calculate the Difference (or Excess)

Implied Cost 650,000

100% BV 450,000

Difference 200,000

2.Calculate Goodwill/(Bargain Purchase Gain)

Implied Cost	650,000
100% FMV	505,000	equals BV plus/minus differences
GW	145,000