marks) (This question is from week 5 Tutorial)

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 acquisition.

Required:

(a) Calculate the acquisition cost of the Machine. (3 marks)

(b) Provide the journal entries that would appear in MAP Ltd.s books to account for the acquisition of the Machine. (4 marks)