Homework Answers
The bundle purchase cost should be allocated to asset on the basis of their fair market value .
Total cost =17000+1300= 18300
| Appraiser estimate of fair value | weights | Purchase cost allocation ($ 18300) | |
| Punch press | 14000 | 14000/24060= .5819 | 18300*.5819= 10649 |
| lathe | 7000 | 7000/24060= .2909 | 18300*.2909= 5323 |
| Welder | 3060 | 3060/24060= .1272 | 18300*.1272= 2328 |
| Total | 24060 | 18300 |
b)The useful life of asset to crow co.
The useful life of asset purchased in hand of crow co. should be used as depreciable life
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Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation...
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bankrupt competitor, at a liquidation sale for a total cost of
$15,000. Crow’s cost of moving and installing the machinery totaled
$1,400. The following data are available:
Item Punch press Lathe Welder Hare's Net Book Value on the Date of Sale 10,760 8,320 3,000 List Price of Same Item If New $ 18,000 9,000 5,000 Appraiser's Estimate of Fair Value 14,000 6,000 3,090 Required: a. Calculate the amount that...
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Item Punch press Lathe Welder Hare's Net Book Value on the Date of Sale 10,760 8,320 3,000 List Price of Same Item If New $ 18,000 9,000 5,000 Appraiser's Estimate of Fair Value 14,000 6,000 3,090 Required: a. Calculate the amount that...
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