Zhang Ltd acquired the business of Azzam Ltd for a cash outlay of $5 000000 on 1 July 2016. The summarised balance sheet of Azzam Ltd on that date was as follows:

	AZZAM LTD Summarised Balance Sheet As at 1 July 2016
	Assets Cash at bank Accounts receivable Inventories Land Plant and equipment (net)		$  185000 370000 870000 740000 2800000
	Total assets		$4965000
	Liabilities and equity Accounts payable Bank loan payable Share capital Retained earnings		520000 1350000 2250000    845000
	Total liabilities and equity		$4965000

Most of the assets were recorded at fair value except for inventories and land, which were assessed to have fair values of $1 000000 and $1 100000 respectively.

Required

A. Determine the amount that Zhang Ltd should record as goodwill or gain on bargain purchase on 1 July 2016.

B. Prepare journal entries in the records of Zhang Ltd to acquire the business of Azzam Ltd on 1 July 2016.

C. Discuss how your answer would differ if Zhang Ltd had paid $3 800 000 cash to acquire the business of Zhang Ltd.