MAP Ltd acquired a Machine from FAT Ltd for the following consideration: o Cash $65 000, o Land in the books of MAP Ltd the land is recorded at its cost of $750 000. It has a fair value of $700 000. MAP Ltd also agrees to assume the liability of the FAT Ltd bank loan of $95 000 as part of the Machine acquistion Calculate the acquisition cost of the Machine Provide the journal entries that would appear in MAP Ltd.’s books to account for the acquisition of the Machine.

MAP Ltd acquired a Machine from FAT Ltd for the following consideration: o Cash $65 000, o Land in the books of MAP Ltd the land is recorded at its cost of $750 000. It has a fair value of $700 000. MAP Ltd also agrees to assume the liability of the FAT Ltd bank loan of $95 000 as part of the Machine acquistion Calculate the acquisition cost of the Machine Provide the journal entries that would appear in MAP Ltd.’s books to account for the acquisition of the Machine.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 7CE

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