Cranberry Company purchased two pieces of equipment from a Canadian vendor for $400,000.If the assets had been purchased separately,the company would have paid $90,000 for the first piece of equipment and $360,000 for the second piece of equipment.What amount should be recorded for the SECOND piece of equipment?

Question

Quizplus · Accepted Answer

The total purchase price is $400,000. The separate prices would have been $90,000 and $360,000, totaling $450,000. To find the allocation for the second piece, calculate the proportion of its separate price ($360,000) to the total separate prices ($450,000), then multiply by the actual payment ($400,000). This gives ($360,000 / $450,000) * $400,000 = $320,000.

Cranberry Company Purchased Two Pieces of Equipment from a Canadian