The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows: Red Corp. Book Value $1,600,000 1,000,000 Sax Inc. Book Value $420,000 800,000 Fair Value $468,000 972,000 72,000 Current assets Plant and equipment Patents Goodwill Total Assets Current liabilities Long-term debt Common shares Retained earnings Total Liabilities and Equity 80,000 $2,680,000 $1,360,000 480,000 720,000 120,000 $2,680,000 40,000 $1,260,000 $252,000 360,000 168,000 480,000 $1,260,000 252,000 384,000 Effective on August 1, Year 3, the shareholders of Sax accepted an offer from Red Corporation to purchase all their common shares. Red's cost for investigating and drawing up the share purchase agreement amounted to $18,000. Red issued 80,000 common shares with market value of $10 per share to the shareholders of Sax Inc. for 100 percent of their shares. Red also paid $10,000 cash as purchase consideration to the shareholders of Sax Inc. Legal fees associated with issuing these shares amounted to $ 8,000 and were paid in cash. In determining acquisition price, Red Corp, considered Sax's unrecorded customer service contract. The value assigned by independent appraiser for the asset is $50,000, 1. Calculate the purchase price of Sax Inc. (1) 2. Determine the fair value of net assets of Sax Inc. on the date of acquisition. (2) 3. Determine amount of goodwillegative goodwill on the date of acquisition (1) 4. Prepare the consolidated balance sheet of Red Corporation as at August 1, Year 3. (12)