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Basket Purchase Allocation: Crow Co. purchased some of themachinery of Hare Inc. a bankrupt competitor, at a liquidation salefor a total cost of 33600. Crow's cost of moving and installing themachinery totaled 3200. The following data are available:

Item Hare's Net Book List Price ofSame Item Appraiser's Est.Fair

Value ifNew

Value Punch Press 20,160 36000 24000

Lathe 16128 18000 12000

Welder 4032 6000 4000

Required:

A. Calculate the amount that should be recored by Crow Co. athe cost of each piece of equipment.

B. Which of the following alternatives should be used as thedeprecable life for Crow's Co.'s depreciation calculation? Explainyour answer. The remaining usefule life to Hare, Inc. The life of a new machine. The useful life of the asset to Crow Co.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9991613

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