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COST OF MACHINE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › COST OF MACHINE

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by John Moffat.
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  • March 6, 2021 at 9:41 am #613721
    Salman0704
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    In the following que I need your help sir?

    ABC Ltd acquired a Machine from XYZ Ltd for the following consideration:
    o Cash $65 000,
    o Land in the books of ABC Ltd the land is recorded at its cost of $750 000.
    It has a fair value of $700 000.
    ABC Ltd also agrees to assume the liability of the XYZ Ltd bank loan of $95 000 as part of the Machine acquisition.
    Required:
    Calculate the acquisition cost of the Machine

    In the above que how will treat land amount in the cost of machine do we include $750000 or $700000 in the cost of machine ?

    In the above que how will treat XYZ ltd bank loan of $95000 in the cost of machine do we include?

    March 6, 2021 at 4:14 pm #613775
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51579
    • ☆☆☆☆☆

    From what you have typed it would seem that the cost of the machine is 65,000 + 95,000 = 160,000. The land has nothing to do with it.

    March 6, 2021 at 4:14 pm #613776
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51579
    • ☆☆☆☆☆

    From what you have typed it would seem that the cost of the machine is 65,000 + 95,000 = 160,000. The land has nothing to do with it.

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