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27 December, 23:23

Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation sale for a total cost of $17,000. Crow's cost of moving and installing the machinery totaled $1,800. The following data are available: Item Hare's Net Book Value on the Date of Sale List Price of Same Item If New Appraiser's Estimate of Fair Value Punch press $ 10,140 $ 19,000 $ 15,000 Lathe 8,740 9,000 5,000 Welder 2,730 6,000 3,060 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.)

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  1. 28 December, 02:34
    0
    Punch Press 12,228.97

    Lather 4,076.32

    Welder 2,494.71

    Explanation:

    We use the fair value of the acquired goods and then compare with the cost:

    Punch press fair value 15,000

    Lather fair value 5,000

    Welder fair value 3,060

    Total 23,060

    All the Cost incurred to get the equipment read y for use:

    17,000 purhcase + 1,800 installation: 18,800

    we now cross multiply for each product:

    15,000/23,060 x 18,800 = 12.228,9679

    5,000/23,060 x 18,800 = 4.076,32263

    3,060/23,060 x 18,800 = 2.494,7094

    Punch Press 12,228.97 debit

    Lather 4,076.32 debit

    Welder 2,494.71 debit

    Cash 18,800 credit
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