Seeder Inc.made a lump-sum purchase of three pieces of machinery for $130,000 from an unaffiliated company.At the time of acquisition,Seeder paid $5,000 to determine the appraised value of the machinery.The appraisal disclosed the following values: What cost should be assigned to Machines A,B,and C,respectively?
A)A: $70,000; B: $42,000; C: $28,000
B)A: $67,500; B: $40,500; C: $27,000
C)A: $65,000; B: $39,000; C: $26,000
D)A: $45,000; B: $45,000; C: $45,000

Question

Seeder Inc.made a lump-sum purchase of three pieces of machinery for $130,000 from an unaffiliated company.At the time of acquisition,Seeder paid $5,000 to determine the appraised value of the machinery.The appraisal disclosed the following values:  What cost should be assigned to Machines A,B,and C,respectively?
A)A: $70,000; B: $42,000; C: $28,000 
B)A: $67,500; B: $40,500; C: $27,000 
C)A: $65,000; B: $39,000; C: $26,000 
D)A: $45,000; B: $45,000; C: $45,000

Quizplus · Accepted Answer

The cost should be allocated to each machine based on their appraised value. Using the values given in the appraisal, the cost assignment for Machines A, B, and C respectively would be:
A: $67,500
B: $40,500
C: $27,000
Therefore, option B is the correct choice.