Question

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of
a. $82,000
b. $90,000
c. $8S,000
d. $93,000

Answer 1

Answer:

Cost basis will be equal to $93000

So option (d) will be correct answer

Explanation:

We have given purchased price of machine = $77000

overhaul costing is given $8000

Installation cost = $5000

And special acquisition fees is given $3000

We have to fond the cost basis

Cost basis will be sum of all purchased price, overhaul cost , installation cost and special acquisition fees

So cost basis will be equal to = $77000+$8000+$5000+$3000 = $93000

So cost basis will be equal to $93000

So option (d) will be correct answer