TXA Ltd acquired a machine from Blue Ltd for the following consideration: Cash $70, 000 Land in

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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.

(b) Provide the journal entries that would appear in TXA Ltd.’s books to account for the acquisition of the Machine.

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0132162302

1st edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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Posted Date: Jun 13, 2020 06:45 AM

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TXA Ltd acquired a machine from Blue Ltd for the following consideration: Cash $70, 000 Land in

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a Acqu isition cost C... View the full answer

Intermediate Accounting

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