Bread Ltd. acquired Biscuit Ltd. on July 1, 20X1. The pre-combination statements of financial position for the two companies and the fair values of their assets and liabilities are presented attached. the deferred development costs are unamortized and related to products that will be on the market in early 20X2. Both companies expect that the deferred development costs to be fully recovered in future years.

Bread: $1,000,000 common shares outstanding

Biscuit: $700,000 common shares outstanding

a) Assume that Bread purchased the assets of Biscuit and assumed it's liabilities by paying $1,400,000 in cash and issuing a note payable for $12,600,000. Calculate thr following balances: i. Goodwill ii. Deferred development costs

b) Assume that Bread acquired Biscuit by purchasing all of Biscuit's outstanding shares. Bread made the acquisition by paying the shareholders $700,000 cash and issuing them new shares worth $9,450,000. Calculate the following balances that would appear on Bread's consolidated statement of financial position immediately after the purchase: i. Goodwill ii. Retained earnings

Biscuit Carrying 1 BREAD Courg Fair Fair PAGO OCCO 12.650 000 250000 ASA er AG Coen AIR Non-Currer les Loc Equipment Deferred Developer 45.col.45.000 1,400,000 ..400,000 1 SECCO 5.9800CO 900 000 LO COD 420 000 529000 mo SE ODO 2490 000 28 00 000 16 So 600 Total Assers BIL 415 Liabilities. Equity Currer Labs 1170000 4500co 455000 cos /p 30 000 Non - Current Liabunties Notes Payable 100 000 1400000 1400 CD 10 300 000 4645000 Shovenoldus Equity Common Shares Reged Earnings 4060 000 3815 000 3101S0000 + 3 16413000 Toti Laalities + Equity