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Answer: $100,000
Explanation:
Firstly, we determine the fair value of net asset which will be:
= $3,000,000 - $900,000 - $200,000
= $100,000
The gain that will be gotten from the acquisition and reported by Pilgrim when recording its investment will be:
= Fair value of net asset + Intangible assets unrecorded - Cash paid
= $100,000 + $5,000,000 - $5,000,000
= $100,000