Alpha Corporation's net assets have fair values as described below:

	Fair Value
Current assets	$400,000
Land	$1,200,000
Buildings and equipment	$1,500,000
Loans payable	$(500,000)

Beta Company pays $4,500,000 for Alpha Corporation and records the acquisition as a merger. Beta Company determines that identifiable intangibles valued at $2,000,000, not previously reported on Alpha’s books, are also recognized as acquired assets.

Required: a. Prepare a schedule to calculate the gain on acquisition. b. Prepare Beta’s journal entry to record the merger. c. Now assume Beta determines that Alpha Corporation has unreported contingent liabilities, reportable at the date of acquisition following GAAP, with a fair value of $100,000. Recalculate the gain on acquisition.