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Hayes Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year. Assets 1 and 2 These

Hayes Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year.

Assets 1 and 2

These assets were purchased together for $119,000 cash. The following information was gathered:

Description Initial Cost on Sellers Books Depreciation to Date on Sellers Books Book Value on Sellers Books Appraised Value
Machinery $125,000 $53,000 $72,000 $114,000
Office Equipment 63,000 10,000 53,000 38,000

Asset 3

This machine was acquired by making a $9,600 down payment and issuing a $33,100, two-year, zero-interest-bearing note. The note is to be paid off in two $16,550 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $35,400.

Asset 4

A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows:

Cost of truck traded $105,000
Accumulated depreciation to date of sale 37,000
Fair market value of truck traded 87,000
Cash received by Hayes 10,200
Fair market value of truck acquired 78,000

Asset 5

Office equipment was acquired by issuing 150 no par value common shares. The shares are actively traded and had a closing market price the day before the office equipment was acquired of $12 per share. Alternatively, the office equipment could have been purchased for a cash price of $1,800.

Construction of Building

A building was constructed on land that was purchased on January 1 at a cost of $142,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows:

Date Payment
Feb. 1 $110,000
June 1 350,000
Sept. 1 475,000
Nov. 1 110,000

To finance construction of the building, a $603,000, 12% construction loan was taken out on February 1. During the beginning of the project, Hayes invested the portion of the construction loan that was not yet expended and earned investment income of $4,600. The loan was repaid on November 1. The firm had $207,000 of other outstanding debt during the year at a borrowing rate of 9% and a $200,000 loan payable outstanding at a borrowing rate of 8%.

Record the acquisition of each of these assets assuming that Hayes prepares financial statements in accordance with IFRS.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to 0 decimal places,e e.g. 5,275.)

Account Titles and Explanation Debit Credit
Acquisition of Assets 1 and 2
Acquisition of Asset 3
Acquisition of Asset 4
Acquisition of Asset 5
Construction of Building

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