Hoffman Limited Acquired a Bundle of Assets for a Cash

question 31

Multiple Choice

Hoffman Limited acquired a bundle of assets for a cash consideration of $400 000. The fair values of the assets on date of acquisition were as follows: machinery $264 000, motor vehicles $176 000. Which of the following is the appropriate journal entry to record this acquisition?

• A) \(\begin{array}{llcc}
• \text { DR } &\text { Property, plant and equipment }& \$ 400000 \\
• \text { CR } & \text { Cash} && \$ 400000\\
• \end{array}\)
• B) \(\begin{array}{llcc}
• \text { DR } &\text { Property, plant and equipment }& \$ 220000 \\
• \text { CR } & \text { Cash} && \$ 220000\\
• \end{array}\)
• C) \(\begin{array}{llcc}
• \text { DR } &\text { Machinery }& \$ 240000 \\
• \text { DR } &\text { Motor vehicles}&\$160000\\
• \text { CR } & \text { Cash} &&\$400000\\
• \end{array}\)
• D)\(\begin{array}{llcc}
• \text { DR } &\text { Machinery }& \$ 264000 \\
• \text { DR } &\text { Motor vehicles}&\$176000\\
• \text { CR } & \text { Cash} &&\$440000\\
• \end{array}\)

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