Bagley Incorporated's 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 $ 1,054,000 Plant and equipment (net) $ 911,000 Patents Current assets 456,000 79,000 508,000 $1,367,000 Ordinary shares $ 183,000 Retained earnings 519,000 Long-term debt 391,000 417,000 Current liabilities 274,000 $1,367,000 274,000 On August 1, Year 4, the directors of Bagley considered a takeover offer from Davis Inc., whereby the corporation would sell all of its assets and liabilities. Davis's costs of investigation and drawing up the merger agreement would amount to $20,000.