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Calculate the acquisition cost of the machine

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Reference no: EM132818167

Question - MAP Ltd acquired a Machine from FAT Ltd for the following consideration:

Cash $65000,

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 acquisition.

Required -

(a) Calculate the acquisition cost of the Machine.

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

Reference no: EM132818167

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