Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation sale for a total cost of $16,000. Crow's cost of moving and installing the machinery totaled $1,100. The following data are available: Hare's List Net Book Price of Value on Same Appraiser the Date Item If Estimate ( Item of Sale New Fair Valu Punch $10,640 $18,000 $14,000 press Lathe 8,100 2,470 5,000 3,040 8,000 Welder 4,000 Required: a. Calculate the amount that should be recorded by Crow Co. as the cost of each piece of equipment. (Do not round intermediate calculations.)
Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation sale for a total cost of $16,000. Crow's cost of moving and installing the machinery totaled $1,100. The following data are available: Hare's List Net Book Price of Value on Same Appraiser the Date Item If Estimate ( Item of Sale New Fair Valu Punch $10,640 $18,000 $14,000 press Lathe 8,100 2,470 5,000 3,040 8,000 Welder 4,000 Required: a. Calculate the amount that should be recorded by Crow Co. as the cost of each piece of equipment. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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hello, I need help please
Transcribed Image Text:round intermediate calculations.)
Purchase Price
Allocation
Punch press
Lathe
Welder
Total
b. Which of the following alternatives
should be used as the depreciable life
for Crow Co.'s depreciation calculation?
O The useful life of the asset to
Crow Co.
The life of a new machine.
O The remaining useful life to
Hare Inc.
Transcribed Image Text:Crow Co. purchased some of the
machinery of Hare Inc., a bankrupt
competitor, at a liquidation sale for a
total cost of $16,000. Crow's cost of
moving and installing the machinery
totaled $1,100. The following data are
available:
Hare's
List
Net Book Price of
Value on
Same
Appraiser
the Date Item If Estimate (
Item
of Sale
New
Fair Valu
Punch
$10,640 $18,000
$14,000
press
Lathe
8,100
2,470
5,000
3,040
8,000
Welder
4,000
Required:
a. Calculate the amount that should be
recorded by Crow Co. as the cost of
each piece of equipment. (Do not
round intermediate calculations.)
Purchase Price
Allocation
Punch press
Lathe
Welder
Expert Solution
Step 1
Formula = (Asset Fair Value / Total Assets Fair value) * Purchase cost
| Appraiser's Estimate of Fair Value |
|
| $ | 14,000 |
| 5,000 | |
| 3,040 | |
| 22,040 | |
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