Norm Bass has just met with you to ask your advice on the possible merger of this two companies. Norm, a Canadian resident, owns 100% of Normpar Inc., which in turn owns 100% of Jonsub Inc. Both are Canadian companies located in Saskatchewan and both have December 31st year-ends. The shares of Jonsub were purchased five years ago at a cost of $4,000,000. The first few years were profitable and in the second year of ownership Jonsub paid a dividend of $500,000 to Normpar, but the last two years have not been good as Jonsub has realized non and net capital losses. It is unlikely that Jonsub will generate sufficient income to absorb the losses in the foreseeable future. However, Normpar expects to generate sufficient business income and taxable capital gains to absorb all of Jonsub's losses. Norm has heard that he could amalgamate the two companies or wind up Jonsub into Normpar, so Normpar could offset its income with the losses. Norm would like your advice on when Normpar can gain access to the losses of Jonsub if the two companies merge on June 30, 2016, either by amalgamating or by winding up Jonsub into Normpar. After the transaction, they want to retain the December 31st year end. Norm is also concerned about what will happen to the $4.0 million ACB that Normpar has in the shares of Jonsub after amalgamation or wind up. The balance Sheet of Jonsub Ltd. immediately before the merger is as follows