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 Plant and equipment (net) Patents Current assets Ordinary shares Retained earnings Long-term debt Current liabilities Carrying Amount $ 922,000 467,000 $ 1,389,000 194,000 508,000 402,000 285,000 $ 1,389,000 Fair Value $ 1,065,000 90,000 519,000 428,000 285,000 On August 1, Year 4, the directors of Bagley considered a takeover offer from Davis Inc., in which the corporation would sell all o assets and liabilities. Davis's costs of investigation and drawing up the merger agreement would amount to $25,500. Required: (a) Assume that Davis made a $1,292,200 cash payment to Bagley for its net assets. Prepare the journal entries in the accountin 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.)

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 Plant and equipment (net) Patents Current assets Ordinary shares Retained earnings Long-term debt Current liabilities Carrying Amount $ 922,000 467,000 $ 1,389,000 194,000 508,000 402,000 285,000 $ 1,389,000 Fair Value $ 1,065,000 90,000 519,000 428,000 285,000 On August 1, Year 4, the directors of Bagley considered a takeover offer from Davis Inc., in which the corporation would sell all o assets and liabilities. Davis's costs of investigation and drawing up the merger agreement would amount to $25,500. Required: (a) Assume that Davis made a $1,292,200 cash payment to Bagley for its net assets. Prepare the journal entries in the accountin 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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