On 1 July 2020, Bird Ltd acquired all of the assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Bird Ltd issued 300,000 shares that at date of issue had a fair value of $4.20 per share. Costs of issuing these shares amounted to $3,000. Legal costs associated with the acquisition of Pitt Ltd amounted to $3,600.

The asset and liabilities of Pitt Ltd at 1 July 2020 were as follows:

Carrying amountFair value

Assets

Cash$6,000$6,000

Accounts receivable30,00030,000

Inventory192,000204,000

Equipment 920,000696,000

Accumulated depreciation equipment(288,000)

Patents720,000840,000

Liabilities

Accounts payable(48,000)(48,000)

Debentures(192,000)(192,000)

Required

A.Prepare the acquisition analysis at 1 July 2020 for the acquisition of Pitt Ltd by Bird Ltd.

B.Prepare the acquisition analysis in the records of Bird Ltd assuming that the shares issued by Bird Ltd had a fair value of $5.80.