Question #4 (22 marks) Parts A, B and C are independent. Unless indicated otherwise, assume company is using IFRS.

Part A. (4 marks)

Scarlett Incorporated purchased a tract of land with an office building and equipment included. The cash price was $900,000 plus $50,000 in fees connected with the purchase. The following data were collected concerning the property:

	Appraisal Value	Vendors Book Value	Original Cost
Land	$220,000	$ 80,000	$ 80,000
Equipment	360,000	170,000	550,000
Office building	440,000	260,000	720,000

Required:

Give the entry to record the purchase; show computations.

	Debit	Credit

Part B. (4 marks)

Alpha Inc. exchanged machinery with an appraised value of $ 1,170,000, a recorded cost of

$1,800,000 and accumulated depreciation of $ 800,000, for machinery that Beta Corp. owns. Betas machinery has an appraised value of $ 1,140,000, a recorded cost of $2,160,000, and accumulated depreciation of $1,188,000. Beta also gave Alpha $30,000 in the exchange. Assume depreciation has been updated to the date of exchange.

Instructions

Prepare the entry on Alphas books assuming that the transaction has commercial substance.

	Debit	Credit