Despite having $1,050,000 in equipment (net) and $565,000 in inventory, Napanee Limited is thought by market analysts to be in poor financial condition. This is primarily due to its low cash reserves of $56,500; high accounts receivables of $750,000; and high accounts payable of $555,500. Common shares at Napanee Limited total $1,500,000 and there is a note payable of $100,000. All figures referenced above are as Napanee Limiteds latest fiscal year-end (March 31, 2018). Assume any residual Liabilities and Equities pertain to retained earnings. During discussions between Napanee Limited and Bancroft Incorporated (a company looking to acquire Napanee Limited as a CGU under IFRS), both parties agreed that the fair value of the inventory was $550,000; the fair value of receivables was $700,000; and that equipment was undervalued by $100,000. Bancroft Incorporated has agreed to purchase Napanee Limited for $3,500,000. Required

(a) With respect to Bancroft Incorporateds purchase of Napanee Limited, determine the value of implied goodwill. For full marks, show all of your work.

(b) Prepare the journal entries in good form to record the purchase of Napanee Limiteds net assets on Bancroft Incorporateds books.