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
Related questions
Question
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
for the acquisition of the Machine.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College