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In: Accounting

Calculation of cost basis of a used machine

A used machine with a purchase price of $41,809, requiring an overhaul costing $9,833, installation costs of $6,615, and special acquisition fees of $32,417, would have a cost basis of

a. $139,539

b. $90,674

c. $51,642

d. $41,809

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Expert Solution

Calculation of cost basis of machine

Given information in the problem

Purchase price of a used machinery = $41,809

Overhaul costing = $9,833

Installation costs  = $6,615

Special Acquisition fee = $32,417

Cost basis of machine = Purchase price +Overhaul costing+ Installation costs + Special Acquisition fee

=$41,809 + $9,833 + $6,615 +$32,417

=$90,674

option b.$90,674 is the correct choice

option b.$90,674 is the correct choice

balaji rao answered 3 years ago
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