The trial balance for the Dark Horse Company is presented below:

Assume that MPL, Inc. offers to acquire Dark Horse at a purchase price of $ 650,000. A study of Dark Horse€™s assets revealed that the inventory had a fair market value of $ 180,000 and the plant assets were undervalued by $ 50,000.
Required
a. Given this set of assumptions, calculate the amount of goodwill or bargain purchase gain to be recorded on the acquisition.
b. Assume now that MPL, Inc. offers to acquire Dark Horse at a purchase price of $ 250,000. Determine the amount of goodwill or bargain purchase gain.
c. Indicate how to account for goodwill and any gain from a bargain purchase in the financial statements.

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Debit 30,000 100,000 370,000 Credit Description Cash Inventory Property, plant, and equipment, net Current liabilities Common stock -no par Retained earnings $ 50,000 150,000 300,000 $500,000 $500,000 Totals