You are a CA who has just been hired by Saskatoon Fields Forever Inc. (SFF), formerly MUGS Partnership (MUGS) as the controller. It is August 1, 2014, your first day at SFF. You are meeting with Meghan Gebhardt, the company president. Meghan began, “I’m sure glad that you joined SFF. SFF acquired all of Biosfair Inc.’s (BFI) out-standing shares on July 1, 2014. I will be relying on your financial skills and leadership to guide us through this time of change.” Meghan continued, “Perhaps we should focus on preparing for our first board of directors meeting, which is scheduled for September 27, 2014. I will need input from you concerning all financial matters that should be reported to the board in light of the recent transactions.

We should send the mailing to the directors at least two weeks in advance of the meeting. But I’m getting ahead of myself. First you need some background information.” Meghan proceeded to hand over stacks of paper. The first is a memo from Meghan describing the history of MUGS and its continuation as SFF. Meghan added, “You will need to know some of the background.” The financial statements for MUGS for the six months ended June 30, 2014, were for its last reporting period as a partnership. Meghan stated, “These statements provide you with a starting point, but the board will need to see the consolidated opening balance sheet as at July 1, 2014.” Information relating to the purchase of BFI and the financial statements of BFI for the six months ended June 30, 2014,. The current intention is to operate SFF and BFI as two separate corporations.

Required

Prepare the report to be presented to the board of directors.