Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Question
Chapter 6, Problem 6.1ME
To determine
Concept Introduction:
Basket Purchase:
Basket purchase is purchase of several items in a bunch paying the lump sum amount for all the items without knowing the purchase cost of each item individually. The recording value of each asset is calculated using the ratio of their fair value.
To Calculate:
The cost to be recorded for commercial safe
Expert Solution & Answer
Answer to Problem 6.1ME
The cost to be recorded for commercial safe is $4,500
Explanation of Solution
The cost to be recorded for commercial safe is calculated as follows:
Item | Appraised Values | Ratio | Lump-Sum Price | Value |
A | B =A/30000 | C | B*C | |
Store Fixtures | $ 9,000 | 0.30 | $ 18,000 | $ 5,400 |
Display Cases | $ 13,500 | 0.45 | $ 18,000 | $ 8,100 |
Commercial Safe | $ 7,500 | 0.25 | $ 18,000 | $ 4,500 |
Total | $ 30,000 | $ 18,000 |
Hence, the cost to be recorded for commercial safe is $4,500
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Chapter 6 Solutions
Accounting: What the Numbers Mean
Ch. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Mini-Exercise 6.3 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.4MECh. 6 - Mini-Exercise 6.5 LO 9 Goodwill Backstreets Co....Ch. 6 - Prob. 6.6MECh. 6 - Exercise 6.7 LO 1 Basket purchase allocation...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10E
Ch. 6 - Exercise 6.11 LO 3 Effect of depreciation on ROI...Ch. 6 - Exercise 6.12 LO 3 Financial statement effects of...Ch. 6 - Exercise 6.13 LO 3 Depreciation calculation...Ch. 6 - Exercise 6.14 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Exercise 6.18 LO 9 Goodwill-effect on ROI and...Ch. 6 - Exercise 6.19 LO 6, 8, 9 Transaction...Ch. 6 - Exercise 6.20 LO 3, 4, 6, 8 Transaction...Ch. 6 - Prob. 6.21PCh. 6 - Prob. 6.22PCh. 6 - Prob. 6.23PCh. 6 - Problem 6.24 LO 3 Partial-year depreciation...Ch. 6 - Problem 6.25
LO 3
Identify depreciation methods...Ch. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31PCh. 6 - Prob. 6.32PCh. 6 - Prob. 6.33CCh. 6 - Prob. 6.34CCh. 6 - Case 6.35 LO 3, 6 Capstone analytical review of...
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