Bagley Incorporateds statement of financial position as at July 31, Year 4, is as follows: BAGLEY INCORPORATED STATEMENT OF FINANCIAL POSITION At July 31, Year 4 Carrying Amount Fair Value Plant and equipment (net) $ 929,000 $ 1,072,000 Patents - 97,000 Current assets 474,000 526,000 $ 1,403,000 Ordinary shares $ 201,000 Retained earnings 501,000 Long-term debt 409,000 435,000 Current liabilities 292,000 292,000 $ 1,403,000 On August 1, Year 4, the directors of Bagley considered a takeover offer from Davis Inc., in which the corporation would sell all of its assets and liabilities. Daviss costs of investigation and drawing up the merger agreement would amount to $29,000.

Required: (a) Assume that Davis made a $1,460,200 cash payment to Bagley for its net assets. Prepare the journal entries in the accounting records of Davis to record the business combination. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

(b) Assume that Davis issued 149,000 ordinary shares, with a market value of $9.80 per share, to Bagley for its net assets. Legal fees associated with issuing these shares amounted to $8,400 and were paid in cash. Davis had 169,000 shares outstanding prior to the takeover.

(i) Prepare the journal entries in the records of Davis to record the business combination. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

(ii) Prepare the statement of financial position of Bagley immediately after the sale.