Crow Company purchased some of the machinery of Hare Incorporated, a bankrupt competitor, at a liquidation sale for a total cost of $136,200. Crow's cost of moving and installing the machinery totaled $12,300. The following data are available Hare's Net Book Value List Price of Same Appraiser's Estimate Item Punch press Lathe Welder on the Date of Sale Item If New of Fair Value $ 85,400 58,200 26,400 $ 131,000 67,000 42,000 $ 108,000 45,000 27,000 Required: a. Calculate the amount that should be recorded by Crow Company as the cost of each piece of equipment. b. Which of the following alternatives should be used as the depreciable life for Crow Company's depreciation calculation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Crow Company purchased some of the machinery of Hare Incorporated, a bankrupt competitor, at a liquidation sale for a
total cost of $136,200. Crow's cost of moving and installing the machinery totaled $12,300. The following data are available:
Appraiser's Estimate
Hare's Net Book Value
List Price of Same
Item
Punch press
Lathe
Welder
on the Date of Sale
Item If New
of Fair Value
$ 85,400
58,200
26,400
$ 131,000
67,000
42,000
$ 108,000
45,000
27,000
Required:
a. Calculate the amount that should be recorded by Crow Company as the cost of each piece of equipment.
b. Which of the following alternatives should be used as the depreciable life for Crow Company's depreciation calculation?
Complete this question by entering your answers in the tabs below.
Required A Required B
Calculate the amount that should be recorded by Crow Company as the cost of each piece of equipment.
Purchase Price
Allocation
Punch press
Lathe
Welder
Total
Transcribed Image Text:Crow Company purchased some of the machinery of Hare Incorporated, a bankrupt competitor, at a liquidation sale for a total cost of $136,200. Crow's cost of moving and installing the machinery totaled $12,300. The following data are available: Appraiser's Estimate Hare's Net Book Value List Price of Same Item Punch press Lathe Welder on the Date of Sale Item If New of Fair Value $ 85,400 58,200 26,400 $ 131,000 67,000 42,000 $ 108,000 45,000 27,000 Required: a. Calculate the amount that should be recorded by Crow Company as the cost of each piece of equipment. b. Which of the following alternatives should be used as the depreciable life for Crow Company's depreciation calculation? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the amount that should be recorded by Crow Company as the cost of each piece of equipment. Purchase Price Allocation Punch press Lathe Welder Total
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