Basket purchase allocation Crow Co. purchased some of the machinery

Basket purchase allocation Crow Co. purchased some of the machinery of Hare, Inc., a bankrupt… 1 answer below » Basket purchase allocation Crow Co. purchased some of the machinery of Hare, Inc., a bankrupt competitor, at a liquidation sale for a total cost of $50,400. Crow’s cost of moving and installing the machinery totaled $4,800. 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                     $30,240   & View complete question » Basket purchase allocation Crow Co. purchased some of the machinery of Hare, Inc., a bankrupt competitor, at a liquidation sale for a total cost of $50,400. Crow’s cost of moving and installing the machinery totaled $4,800. 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                     $30,240                              $54,000                            $36,000 Lathe                                    24,192                                27,000                              18,000 Welder                                    6,048                                  9,000                                 6,000 Required: a. Calculate the amount that should be recorded by Crow Co. as the cost of each piece of equipment. b. Which of the following alternatives should be used as the depreciable life for Crow Co.’s depreciation calculation? Explain your answer. The remaining useful life to Hare, Inc. The life of a new machine. The useful life of the asset to Crow Co.


 

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