Headquartered in Toronto, The Shoppers Drug Mart Corporation is Canada's largest retail pharmacy chain with more than 1,241 stores across Canada. The company also licenses or owns 60 medical clinic pharmacies as well as six luxury beauty destinations. The company reported the following in its annual report for the year ended December 29, 2012:

Required

a. Identify the tangible and intangible assets that the company acquired. What proportion of the total price was for intangible assets?

b. Do any of the acquired intangible assets have indefinite lives? Explain.

c. Explain in layman's terms the meaning of goodwill.

d. Why is prescription files an intangible asset? How will Shoppers Drug Mart realize value from this asset?

e. How will the company account for goodwill in 2013 and beyond?

f. How did Shoppers Drug Mart account for the income of Paragon in fiscal 2012?

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BUSINESS ACQUISITIONS (in thousands of Canadian dollars) Paragon Pharmacies Limited On August 1, 2012, the Company acquired substantially all of the assets of Paragon Pharmacies Limited ("Paragon") for a cash purchase price of $72,059. The acquisition included 19 retail pharmacies and three central fill pharmacies in British Columbia, Alberta, and Manitoba.... The following table summarizes the consideration paid for Paragon, and the amounts recognized for the assets acquired and liabilities assumed at the acquisition date. Fair value of net assets acquired as at acquisition date Cash.... Accounts receivable (gross amount of $4,751, net of allowance of $430).. Inventory...... Prepaid expenses.. Property and equipment... Prescription files.. Customer relationships Accounts payable and accrued liabilities. Net assets acquired ..... Goodwill, net of deferred taxes Total cash purchase price Cash acquired ..... Purchase price, net of cash acquired.... ... $43 4,321 7,906 611 4,929 20,000 8,000 (1,245) 44,565 27,494 72,059 (43) $72,016