Question

please let me know what did I wrong here. What I did is (110000/265000*210000) and (155000/265000)*210000.

Application Problem 8-3A a-c (Part Level Submission) On March 20, 2020, FineTouch Corporation purchased two machines at auction for a combined total cost of $210,000. The machines were listed in the auction catalogue at $110,000 for machine X and $155,000 for machine Y. Immediately after the auction, FineTouch had the machines professionally appraised so it could increase its insurance coverage. The appraisal put a fair value of $107,100 on machine X and $130,900 on machine Y. On March 24, FineTouch paid a total of $4,600 in transportation and installation charges for the two machines. No further expenditures were made for machine X, but $6,000 was paid on March 29 for improvements to machine Y. On March 31, 2020, both machines were ready to be used The company expects machine X to last five years and to have a residual value of $4,000 when it is removed from service, and it expects machine Y to be useful for eight more years and have a residual value of $14,590 at that time. Due to the different characteristics of the two machines, different depreciation methods will be used for them: machine X will be depreciated using the double-diminishing-balance method and machine Y using the straight-line method. (a) Your answer is partially correct. Try again. Prepare the journal entry to record the purchase of the machines, indicating the initial cost of each. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round percentage to 1 decimal place, for e.g. 40.1 and Round answers to the nearest whole dollar, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit X Mar. 20 Machinery X 87170 Machinery Y 122830 Cash 210000

It was my second attempt, and my first attempt was 87150 and 122850 for each. For the first attempt I got each machine's percentage first (41.5% and 58.5%) and then calculated.

Answer 1

The purchase price paid should be allocated based on the appraised value of the assets Asset Ratio Machinery X Machinery Y Appraised Value $1,07,100 $1,30,900 $2,38,000 Allocation of Purchase Price 45% ($210000 x 45%] $94,500 55% [$210000 x 55%] $1,15,500 $2,10,000 Credit Journal Entry Date Account Title Debit Mar 20 Machinery X $94,500 Machinery Y $1,15,500 Cash (To record purchase of Machinery) $2,10,000