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

Solutions

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 2 years ago

Next > < Previous

Related Solutions

A new machine cost $47,000. The machine will be depreciated on a straight-line basis over 5...

A new machine cost $47,000. The machine will be depreciated on a straight-line basis over 5 years to a salvage value of $1,000. The machine will be sold 5 years from now for $15,000. The machine will provide 11,000 per year in savings for 5 years and will require net working capital investment of $1,000. The tax rate is 12% and the discount rate is 12%. Find the NPV of the project. Round your answer to the nearest dollar.

A new machine cost $44,000. The machine will be depreciated on a straight-line basis over 5...

A new machine cost $44,000. The machine will be depreciated on a straight-line basis over 5 years to a salvage value of $2,000. The machine will be sold 4 years from now for $23,000. If the tax rate is 18%, what is the after-tax gain on the sale of the machine? Round your answer to the nearest dollar.

A new machine cost $45,000. The machine will be depreciated on a straight-line basis over 5...

A new machine cost $45,000. The machine will be depreciated on a straight-line basis over 5 years to a salvage value of $1,000. The machine will be sold 5 years from now for $16,000. The machine will provide 11,000 per year in savings for 5 years and will require net working capital investment of $2,000. The tax rate is 12% and the discount rate is 12%. Find the NPV of the project. Round your answer to the nearest dollar. ASAP...

The company applies overhead cost to jobs on the basis of machine-hours worked. For the current...

The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur $450,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased on account, $ 410,000 b. Raw materials were requisitioned for use in production, $ 380,000 ($360,000 direct materials and $20,000 indirect materials). c. The following costs were incurred for employees services: direct labor, $...

Kookaburra Ltd used the cost model to measure its machine. Machine Z had cost of $80...

Kookaburra Ltd used the cost model to measure its machine. Machine Z had cost of $80 000 and had a carrying amount of $70 000 at 30 June 2020 and is depreciated on a straight-line basis over a 10-year period. On 31 December 2020, the directors of Kookaburra Ltd decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine Z was revalued to $70 000 with an expected useful life of 8...

ABC corporation purchased machine Z beginning 2016 at a cost of $120000. the machine is used...

ABC corporation purchased machine Z beginning 2016 at a cost of $120000. the machine is used in the productin of product X. the machine is expected tto have a useful life of 10 years and no residual value. the straight line methods of depreciation is used. if you know that at december 31,2018, the appraisal value of machine Z is $88 200. at December 2020 an adverse economic conditions result in a signigicant decline in demand for Product X and...

When operating a business the calculation of taxable income is important as it is the basis...

When operating a business the calculation of taxable income is important as it is the basis for determining the amount of tax that must be paid on the income of the business. How is taxable income computed by the business if it is operated as a "C" corporation, and "S" corporation or a partnership?

When operating a business the calculation of taxable income is important as it is the basis...

Cost applicable to products calculation

Below some information has been provided. Answer the required questions from the info provided.

Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs...

Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $322,000 of overhead costs are incurred and 130,000 hours are used. Collapse question part (a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate $ per machine hour

Subjects