y correct Mark 17.14 out of 20.00 PRag question Bargain Purchase Sontag Corporation's net assets have fair values as described below. Current assets Land Fair Value $250.000 800.000 Buildings and equipment 1.000.000 Loans payable (300,000) The Pratt Company pays $3,000,000 for Sontag Corporation, and records the acquisition as a merger. Pratt Company determines that identifiable intangibles valued at $1,500,000, not previously reported on Sontag's books, also are recognized as acquired assets. Required a. Prepare a schedule to calculate the gain on acquisition. Use a negative sign with any answer that reduces the fair value of net assets (left column only). Price paid $ 0x Fair value of identifiable net assets Current assets 250,000 Land 800000 Buildings and equipment 1000000 Identifiable intangibles Loans payable 1500000 -300000 0x Gain on acquisition $ 250000 b. Prepare Pratt's journal entry to record the merger. Not all drop-down answers may be required for the journal entry. If an account is not required, select "N/A" as your answer. Description Current assets Land Buildings and equipment Debit 250000 Credit 6000 800000 1000000 Identifiable intangibles 1500000 Loans payable = 7 0~ 300000 Gain on acquistion Cash c. Now assume Pratt determines that Sontag Corporation has unreported contingent liabilities, reportable at the date of acquisition following GAAP, with a fair value of $75,000. Recalculate the gain on acquisition. $ 175000