On October 1, Year 1, Pepper Inc. acquired 100% of Salt Inc. for $275,000. On that date, the carrying values of Salt Inc.'s assets and liabilities were $450,000 and $200,000, respectively. The fair values of Salt's assets and liabilities were $550,000 and $200,000, respectively. Additionally, Salt had identifiable intangible assets at the time of acquisition with a fair value of $60,000. What is the gain to be reported on Pepper's December 31, Year 1 consolidated income statement? $0 $25,000 $75,000 $135,000