Answered
Gemma Limited acquired a number of assets for $400 000 cash. The fair values of the assets on date of acquisition were: building $320 000, furniture and fittings $80 000. The correct journal entry to record this acquisition is:
a.b. DR Property, plant and equipment $440,000 CR Cash $440,000\begin{array}{lr}\text { DR Property, plant and equipment }&\$440,000\\\text { CR Cash }&&\$440,000\\\end{array} DR Property, plant and equipment CR Cash $440,000$440,000
b. DR Property, plant and equipment $440,000 CR Cash $440,000\begin{array}{lr}\text { DR Property, plant and equipment }&\$440,000\\\text { CR Cash }&&\$440,000\\\end{array} DR Property, plant and equipment CR Cash $440,000$440,000
c. DR Building $320,000 DR Furniture and fittings $80,000 CR Cash $400,000\begin{array}{lr}\text { DR Building } & \$ 320,000 \\\text { DR Furniture and fittings }\quad\quad\quad\quad & \$ 80,000\\\text { CR Cash }&&\$400,000\end{array} DR Building DR Furniture and fittings CR Cash $320,000$80,000$400,000
d. DR Building $352,000 DR Furniture $88,000 CR Cash $440,000\begin{array}{lr}\text { DR Building }\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad & \$ 352,000 \\\text { DR Furniture } & \$ 88,000\\\text { CR Cash }&&\$440,000\end{array} DR Building DR Furniture CR Cash $352,000$88,000$440,000
On Jul 13, 2024