The balance sheet of Drake Enterprises as at December 31, Year 5, is as follows: Assets Cash $ 99,000 Accounts receivable 143,000 Inventory 191,400 Property, plant, and equipment 1,692,000 Accumulated depreciation (900,000) $1,225,400 Liabilities and Equity Current liabilities $ 242,000 Bonds payable 352,000 Common shares ( 100,000 shares) 220,000 Retained earnings 411,400 $1,225,400 Effective January 1, Year 6, Drake proposes to issue 82,500 common shares (currently trading at $20 per share) for all of the common shares of Hanson Industries. In determining the acquisition price, the management of Drake noted that Hanson Industries has unrecorded customer service contracts and directed its accounting staff to reflect this when recording the acquisition. An independent appraiser placed a value of $150,000 on this unrecorded intangible asset. Direct costs associated with the acquisition were as follows: Costs of issuing shares $44,000 Professional fees 38,500 $82,500