"Long$-$Term Operating Assets: Acquisition, Cost Allocation, and Derecognition

$"$

Goodwill and Bargain Purchase Computations

"The trial balance for the Dark Horse Company follows:

$"$

Description Debit Credit

Cash $$30,000$

Inventory $100,000$

Property, plant, and equipment $$ Net $370,000$

Current liabilities $$50,000$

Common stock $$ No par $150,000$

Retained earnings $300,000$

Totals $$500,000$ $$500,000$

MPL$,$ Inc. offers to acquire Dark Horse. The additional information is given below:

"Purchase price

$($Requirement $1$ assumption$)"$ $$650,000$

"Purchase price

$($Requirement $2$ assumption$)"$ $$250,000$

Fair market value of the inventory $$180,000$

The plant assets were undervalued by $$50,000$