2. My little sister __________ (to sleep) now. My little sister __________ (to sleep) at that time yesterday.

2. My little sister is sleeping now. My little sister was sleeping at that time yesterday.

В первом случае необходимо употребить Present Continuous, т.к. действие происходит сейчас. Во втором случае - Past Continuous, т.к. действие происходило в определенное время в прошлом.

Ответ: My little sister is sleeping now. My little sister was sleeping at that time yesterday.