Olive Inc., a Canadian company whose functional currency is Canadian dollars, acquired 100% of the outstanding common shares of Oil Ltd. on January 1, 2013. At the date of acquisition, Olive Inc. paid U.S. $250,000 to the former shareholders of Oil Ltd. The net assets of Oil Ltd. at that date totaled $200,000 U.S. dollars and was comprised of U.S. $100,000 common shares and U.S. $100,000 retained earnings (all of which was earned in 2012). Of that difference, U.S. $25,000 was due to an increase in the fair market value of a plant located in Connecticut, which has a remaining useful life of 10 years. Oil Ltd.'s income tax rate is 30%. All of the main operations of Oil Ltd. take place in Connecticut, USA and most of its sales and input costs are also within the USA. The financial statements of Oil Ltd. are as follows:

OIL LTD.
Income Statement
For the Year Ended December 31, 2013
In US $
Total Revenues .............. 675,000
Cost of goods sold ............ 300,000
Gross profit ............... 375,000
Selling expenses ........... 100,000
General and administrative expenses ..... 100,000
Income before income taxes ....... 175,000
Income tax expense ........... 50,000
Net income ..............$125,000
Additional information:
Foreign exchange rates between the Canadian dollar and U.S. dollar are as follows:
January 1, 2013: .........U.S. $1 = C $1.03
December 31, 2013: .........U.S. $1 = C $0.96
Average 2012 rate: .........U.S. $1 = C $1.01
Average 2013 rate: .........U.S. $1 = C $0.98
Required
(a) Calculate the acquisition analysis and adjustments as at December 31, 2012 and December 31, 2013.
(b) Prepare the translated financial statements of Oil Ltd. As at December 31, 2013 into Canadian dollars.

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OIL LTD Statement of Financial Position As at December 31 In U.S. $ 2013 2012 Cash Accounts Receivable Inventory Total Current Assets Property, Plant and Equipment (net) Total Assets $150,000 300,000 500,000 950,000 675,000 $1,625,000 $200,000 450,000 475,000 1,125,000 725,000 $1,850,000 Bank overdraft Accounts Payable Other liabilities Total Liabilities Common Shares Retained Earnings Total Shareholder's Equity Total Liabilities & Shareholder's Equity $275,000 350,000 675,000 1,300,000 100,000 225,000 325,000 $1,625,000 $325,000 375,000 950,000 1,650,000 100,000 100,000 200,000 $1,850,000