Carter Company acquired three machines for $560,000 in a package deal. An appraisal indicated that the three machines ha...
Carter Company acquired three machines for $560,000 in a package deal. An appraisal indicated that the three machines had the following market values: Machine 1: $180,000 Machine 2: $150,000 Machine 3: $360,000 What is the cost for Machine 2 for Carter Company?
Homework Answers
| Machine | Market values | Percentage of market values | Allocated cost |
| Machine 1 | $180,000 | 180,000/690,000 = 0.260869565 | 560,000 x 0.260869565 = 146,087 |
| Machine 2 | $150,000 | 150,000/690,000 = 0.217391304 | 560,000 x 0.217391304 = 121,739 |
| Machine 3 | $360,000 | 360,000/690,000 = 0.52173913 | 560,000 x 0.52173913 = 292,174 |
| Total | $690,000 | $560,000 |
cost for Machine 2 for Carter Company = $121,739
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