Prepare journal entries to record the transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![auisitions
Problem 23-5 (IAA)
1. Nutty Company made the following individual cash
purchases:
000,000
taken.
Land and building
Machinery and office
Delivery equipment
6,000,000
1,800,000
500,000
equipment
the old
lachine
An appraisal disclosed the following fair value:
1,000,000
3,000,000
800,000
400,000
350,000
Land
entity
onthly
chine
Building
Machinery
Office equipment
Delivery equipment
2. Nutty Company acquired the assets of another entity with
the following fair value:
sed a
rest
The
1,000,000
5,000,000
2,000,000
Land
Building
Machinery
The entity issued 60,000 shares with P100 par value in
exchange. The share had a quoted price of P150 on the date
of purchase of the property.
of
ary
3. Received a parcel of land located in Davao City from a
philanthropist as an inducement to locate a plant in the
city. The land has a fair value of P1,500,000.
is-
4. The entity paid cash for machinery, P900,000 subject to 2%
cash discount, and freight on machinery, P35,000.
5. The entity acquired furniture and fixtures by issuing a
P400,000 two-year noninterest-bearing note. In similar
transactions, the entity has paid 12% interest.
The present value of 1 at 12% for 2 years is .797, and the
present value of an annuity of 1 at 12% for 2 years is 1.69.
Required:
Prepare journal entries to record the transactions.
653](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffcc811a4-4c66-48fe-aa42-e9e7ed6ddd86%2Fcc2a1676-7bac-4eea-bc8f-997f566f5b8d%2F3bdqzh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:auisitions
Problem 23-5 (IAA)
1. Nutty Company made the following individual cash
purchases:
000,000
taken.
Land and building
Machinery and office
Delivery equipment
6,000,000
1,800,000
500,000
equipment
the old
lachine
An appraisal disclosed the following fair value:
1,000,000
3,000,000
800,000
400,000
350,000
Land
entity
onthly
chine
Building
Machinery
Office equipment
Delivery equipment
2. Nutty Company acquired the assets of another entity with
the following fair value:
sed a
rest
The
1,000,000
5,000,000
2,000,000
Land
Building
Machinery
The entity issued 60,000 shares with P100 par value in
exchange. The share had a quoted price of P150 on the date
of purchase of the property.
of
ary
3. Received a parcel of land located in Davao City from a
philanthropist as an inducement to locate a plant in the
city. The land has a fair value of P1,500,000.
is-
4. The entity paid cash for machinery, P900,000 subject to 2%
cash discount, and freight on machinery, P35,000.
5. The entity acquired furniture and fixtures by issuing a
P400,000 two-year noninterest-bearing note. In similar
transactions, the entity has paid 12% interest.
The present value of 1 at 12% for 2 years is .797, and the
present value of an annuity of 1 at 12% for 2 years is 1.69.
Required:
Prepare journal entries to record the transactions.
653
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