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H15020 CORPORATE ACCOUNTING Recorded Tutorial 1 CHAPTER 4 Question 1. Critically examine the three different characteristics of an asset that are outlined in the definition of Assets. Question 2. Tea Tree Bay Lid acquires a Gizmo Machine from Jetsons Lid for the following consideration: Cash $20 000 In the books of Tea Tree Bay Lid the land is recorded at its cost of $100 000. It has a fair value of $140 000. Land In the books of Tea Tree Bay Ltd the equipment is recorded at a cost of $50000. The equipment has an accumulated depreciation balance of $20000. The fair value of the equipment is $23000 Equipment: Tea Tree Bay Ltd also agrees to assume the liability of Jetsons Ltd's bank loan of $30 000 as part of the Gizmo Machine acquisition Assumption of liability Other associated COSIS Tea Tree Bay Ltd also spend $5000 as the installation cost. Testing cost was $2500. Transportation cost for the machine was $700. During first year of operation, the company paid $650 as the maintenance cost for the machine. REQUIRED (a)Calculate the acquisition cost of the Gizmo Machine that will be used as the base for future depreciation charge. (b)Provide the journal entries that would appear in Tea Tree Bay Lid's books to account for the acquisition of the Gizmo Machine (c) Will the maintenance cost be included in the acquisition cost of the machine? Justify your