On December 31, 2020, the condensed balance sheets for SASK Limited and NB Inc. were as follows:

	SASK Ltd.	NB Inc.
Assets:
Cash	44,000	80,000
Accounts Receivable	480,000	420,000
Inventories	650,000	540,000
Property Plant & Equipment	2,610,000	870,000
Accumulated Depreciation	(1,270,000)	(130,000)
Total Assets	2,514,000	1,780,000
Liabilities:
Current Liabilities	640,000	560,000
Bonds Payable	840,000	490,000
Total Liabilities	1,480,000	1,050,000
Shareholders Equity:
Common Shares	200,000	400,000
Retained Earnings	834,000	330,000
Total SE	1,034,000	730,000
Total Liabilities and SE	2,514,000	1,780,000

The fair value if all of NBs assets and liabilities were equal to their carrying value except for the following:

Item	Carrying Value	Fair Value
Inventories	540,000	570,000
Property Plant & Equipment	740,000	790,000
Bonds Payable	490,000	550,000

Required:

1. Assume that on January 1, 2021, SASK acquired all of NBs net assets by issuing new common shares with a fair value of $1,000,000. This was the only transaction on this day.
   1. Prepare the journal entry on SASKs books to record the purchase of NBs net assets. (5 marks)
   2. Prepare a balance sheet for SASK on January 1, 2021, after recording the purchase of NBs net assets. (10 marks)

2. Ignore part (A). Assume instead that on January 1, 2021, SASK acquired all of NBs common shares by issuing new common shares with a fair value of $1,000,000. This was the only transaction on this day.
   1. Prepare the journal entry on SASKs books to record the purchase of NBs common shares. (5 marks)
   2. Prepare a schedule to calculate and allocate the acquisition differential. (10 marks)
   3. Prepare a consolidated balance sheet for SASK and its subsidiary on January 1, 2021, after recording the purchase of NBs common shares. Use the worksheet method. (15 marks)

3. What are the similarities and differences between the balance sheets in part (A) and (B)? (5 marks)