Problem $03-05($LO$3)$

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

Plant and equipment $($net$)$ $ $928,000$ $ $1,071,000$

Patents $-96,000$

Current assets $473,000525,000$

$ $1,401,000$

Ordinary shares $ $200,000$

Retained earnings $502,000$

Long$-$term debt $408,000434,000$

Current liabilities $291,000291,000$

$ $1,401,000$

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. Davis$$s costs of investigation and drawing up the merger agreement would amount to $$28,500.$

Required:

$($a$)$ Assume that Davis made a $$1,435,600$ 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.$)$

Required:

$($a$)$ Assume that Davis made a $$1,435,600$ 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.$)$

Answer is not complete.