TXA Ltd acquired a machine from Blue Ltd for the following consideration: Cash $70, 000 Land in
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Question:
TXA Ltd acquired a machine from Blue Ltd for the following consideration:
- Cash $70, 000
- Land in the books of TXA Ltd the land is recorded at its cost of $650,000.
- It has a fair value of $450,000.
- TXA Ltd also agrees to assume the liability of the Blue Ltd bank loan of $89,000 as part of the machine acquisition.
- Required:
- (a)Calculate the acquisition cost of the machine. (2 marks)
- (b)Provide the journal entries that would appear in TXALtd.'sbooks to account for the
- acquisitionof the Machine. (8 marks)
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