A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of
A) $114,000
B) $126,000
C) $121,000
D) $132,000

Question

Quizplus · Accepted Answer

The cost basis of a machine includes the purchase price plus all additional costs necessary to get it ready for use. Therefore, the cost basis is $109,000 (purchase price) + $12,000 (transportation costs) + $5,000 (installation costs) + $6,000 (special acquisition fees) = $132,000.

A New Machine with a Purchase Price of $109,000, with Transportation