HA3011 – TXA Ltd acquired a machine from Blue Ltd
Question 1 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. Question 2 Max Ltd acquires an item of machinery on 1 July 2016 for a total acquisition cost of $61,000. The life of the asset is assessed as being six…
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