The two independent cases that follow involve shares of eligible small business corporations (ESBCs) that are being sold, with all or part of the proceeds being used to acquire shares of other ESBCs.

The shares that are being sold have been owned for more than one year.

Case A In January 2022, Martha Cutler sold her common shares in A Ltd. for proceeds of $1,500,000. A Ltd. is an ESBC. She realized a $250,000 capital gain on this disposition. In March 2022, she invested $1,200,000 of the proceeds in B Ltd., a new ESBC.

Case B In April 2022, Thomas Wolf sold his common shares in C Ltd. for $5,600,000. C Ltd. is an ESBC. He realized an $850,000 capital gain on this disposition. All the proceeds from this sale were immediately invested in two ESBCs, D Ltd. at a cost of $2,600,000 and E Ltd. at a cost of $3,000,000.

Required: For both cases, determine the capital gains the individuals can defer as well as the ACB of the replacement shares