Gemma Limited Acquired a Number of Assets for $400 000 $\begin{array}{lr}\text { DR Property, plant and equipment }&\$440,000\\\text { CR Cash }&&\$440,000\\\end{array}$

question 10

Short Answer

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. $\begin{array}{lr}\text { DR Property, plant and equipment }&\$440,000\\\text { CR Cash }&&\$440,000\\\end{array}$

b. $\begin{array}{lr}\text { DR Property, plant and equipment }&\$440,000\\\text { CR Cash }&&\$440,000\\\end{array}$

c. $\begin{array}{lr}\text { DR Building } & \$ 320,000 \\\text { DR Furniture and fittings }\quad\quad\quad\quad & \$ 80,000\\\text { CR Cash }&&\$400,000\end{array}$

d. $\begin{array}{lr}\text { DR Building }\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad & \$ 352,000 \\\text { DR Furniture } & \$ 88,000\\\text { CR Cash }&&\$440,000\end{array}$

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