A new machine with a purchase price of $96,444, with transportation costs of $7,471, installation...
Question:
A new machine with a purchase price of $96,444, with transportation costs of $7,471, installation costs of $5,445, and special acquisition fees of $2,991, would have a cost basis of:
a. $112,351
b. $101,889
c. $96,444
d. $104,880
Cost Basis:
Cost basis is the purchase price of the assets such as buildings, machinery, and equipment and any directly related costs. Directly related costs are important to bring the asset to its required form.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerAll listed costs are part of the cost basis of the new machine. Each of these costs is needed in order to prepare and ready the machine for...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Calculating an Entity Owner's Basis in C Corporation Stock for Federal Income Tax
from
Chapter 10 / Lesson 7
13K
In this lesson, we will explain how to calculate a shareholder's basis in C corporation stock for federal income tax purposes. We will demonstrate how to reconcile the beginning and ending bases using an example.
Related to this Question
- A new machine with a purchase price of $93,400, with transportation costs of $9,941, installation costs of $6,155, and special acquisition fees of $2,585, would have a cost basis of: A. $102,140 B. $112,081 C. $99,555 D. $93,400
- 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. $121,000 b.
- A new machine with a purchase price of $84,143.00, with transportation costs of $7,632.00, installation costs of $5,105.00, and special acquisition fees of $2,525.00. Calculate a cost basis.
- A new machine with a purchase price of $90,000, transportation costs of $8,000, installation costs of $6,000, and special handling fees of $2,000, would have a cost basis of: a. $106,000 b. $110,000 c. $108,000 d. $102,000
- 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) $93,000 b)
- A used machine with a purchase price of $34,953.00, requiring an overhaul costing $8,995.00, installation costs of $4,621.00, and special acquisition fees of $29,424.00. would have a cost basis of: - $43,948.00 - $34,953.00 - $77,993.00 - $121,033.00
- A used machine with a purchase price of $31,850.00, requiring an overhaul costing $8,619.00, installation costs of $6,966.00, and special acquisition fees of $13,594.00, would have a cost basis of A) $31,850.00 B) $61,029.00 C) $40,469.00 D) $90,208.0
- A used machine with a purchase price of $42,187, requiring an overhaul costing $9,990, installation costs of $6,271, and special acquisition fees of $12,007, would have a cost basis of: a. $42,187 b. $70,455 c. $52,177 d. $98,723
- A used machine with a purchase price of $34,125, requiring an overhaul costing $9,454, installation costs of $6,055, and special acquisition fees of $15,144, would have the best basis of: a. $64,778 b. $43,579 c. $34,125 d. $95,431
- What would be the cost basis for a used machine with a purchase price of $34,953.00, requiring an overhaul costing $8,995.00, installation costs of $4,621.00, and special acquisition fees of $29,424.0
- All of the following are included in the acquisition cost of property, plant, and equipment except: a. transportation costs. b. taxes on the purchase. c. installation costs. d. maintenance costs.
- Answer the following questions: 1) A used machine with a purchase price of $54,000, requiring an overhaul cost $5,000, installation costs of $3,000, and special acquisition fees of $1,000, would have
- Which of the following should be included in the acquisition cost of a piece of equipment? a. testing costs prior to placing the equipment into production. b. transportation costs. c. installation costs. d. all of these.
- Which of the following should be included in the acquisition cost of a piece of equipment? A. Transportation costs. B. Testing costs prior to placing the equipment into production. C. Installation costs. D. All of these choices are correct.
- Which of the following expenditures would not be capitalized as part of the cost of purchasing a piece of equipment? a. Transportation costs to get the new equipment to the buyer's factory. b. The cost to train employees to maintain the new equipment. c.
- Which of the following is NOT a part of the acquisition cost of an equipment purchase? a. Transportation costs to deliver the equipment b. Installation costs to set up and test the equipment c. Sales tax on the purchase Interest cost on the loan to financ
- The following expenditures relate to machinery purchased by Godfrey Manufacturing: | Purchase price | $16,000 | Transportation costs | 800 | Installation | 500 | Repair of part broken during installation | 300 | Sales Tax | 1,000 What amount should Godf
- Which one of the following costs will not be included in the cost of the equipment? a. Installation costs b. Delivery fees c. Maintenance costs d. Sales taxes associated with buying the equipment e. Assembly costs
- The following expenditures were incurred to buy a new machine: Invoice, $32,000 less 8% cash discount. Freight charges, $460. Assembly charges, $1,000. Special base to support machine, $501. Machine dropped and repaired $320. What is the actual cost
- Your firm purchases equipment and you are given the following data: Cost $10,000 Sales tax 700 Delivery cost 100 Installation cost 75 For what amount do you debit the Equipment account? a. $10,000 b. $10,700 c. $10,775 d. $10,875
- Your firm purchases equipment and you are given the following data: Cost $10,000, Sales tax $700, Delivery cost $100, Installation cost $75. For what amount do you debit the Equipment account?
- Your firm purchases equipment and you are given the following data: Cost $10,000 Sales tax 700 Delivery cost 100 Installation cost 75 For what amount do you debit the Equipment account? a. $10,775 b. $10,800 c. $10,000 d. $10,875 e. $10,700
- The cost at which a company records purchases of machinery and equipment should include which of the following? a. Shipping fees b. Installation c. Taxes d. Purchase price
- Major Manufacturing purchased a machine with a contract price of $400,000 and cash terms of 2/10, n/30, on August 28, 2009. The company paid $8,000 in transportation costs and $8,000 for installation. Sales taxes of $22,000 were paid in invoice amount. Th
- The cost of plant assets includes: a. Purchase price. b. Freight costs paid by the purchaser. c. Installation costs. d. All of the above.
- The cost of plant assets include: a. Purchase price b. Freight costs paid by the purchaser c. Installation costs d. All of the above.
- On July 16, 2011, a firm purchased a machine costing $500,000. The firm paid $80,000 in shipping costs and $30,000 for testing the machine and preparing it for use. The machine is being depreciated using the units-of-production method and has an estimated
- John company purchases equipment for a contract price of $300,000 with terms of 2/10 n 30. They incur a sales tax of $18,000 transportation costs of $5,000 and installation costs of $15,000 and uninsu
- Calculate the cost acquisition of machinery Machinery $3 million Additional expenses are: $40,000 customization $30,000 initial one time legal, transportation, assembling $11,000 for insurance $15,000 annual maintenance cost
- Alladin Company purchased Machine #201 on May 1, 2017. The following information relating to Machine #201 was gathered at the end of May. Price $85,000 Credit terms 2/10, n/30 Freight-in $ 800 Preparation and installation costs $ 3,800 Labor costs during
- Jordash Company purchased Machine #573 on May 1, 2015. The following information relating to Machine #573 was gathered at the end of May. Price $36,750 Credit terms 2/10, n/30 Freight-in costs $ 485 Preparation and installation costs $1,900 Labor costs d
- Alladin Company purchased machine #201 on May 1, 2012. The following information relating to machine #201 was gathered at the end of May: Price $85,000 Credit terms 2/10, n/30 Freight-in costs $800 Preparation and installation costs $3,800 Labor costs
- Fogelberg Company purchased equipment for $30,000. The sales tax on the purchase was $1,500. Other costs incurred were freight charges of $400, repairs of $700 for damage during installation, and installation costs of $450. What is the cost of the equipme
- Compute the amount recorded as the cost of a new machine given the following payments related to its purchase: gross purchase price, $700,000; sales tax, $49,000; purchase discount taken, $21,000; freight cost-terms FOB shipping point, $3,500; normal asse
- Cost which consists of some fixed and some variable cost with respect to machine setup hours is classified as: a) setup cost b) batch cost c) facility cost d) lump sum cost
- Which of the following would not be included in the Equipment account? a. Cost of trial runs. b. Freight costs. c. Electricity used by the machine. d. Installation costs.
- Stories Company purchased equipment and these costs were incurred: Cash price $22,500 Sales taxes 1,800 Insurance during transit 320 Installation and testing 430 Total costs $25,050 Stories will record the acquisition cost of the equipment as: a) $22,500
- Freight costs paid on the purchase of new equipment. Are classified as: A. Buildings B. Machinery and Equipment C. Land D. Land Improvements
- The incremental costs are purchase price ($3,000) and cash operating cost ($500). What are the sunk costs, if any in this situation?
- The amount to include in the entry to record the cost of a property, plant, and equipment asset would include: A. acquisition cost B. installation C. freight D. all of the above
- Which of the following costs related to the purchase of production equipment incurred by SAB Company during 2009 would be considered a revenue expenditure? a. Installation costs for equipment. b. Purchase price of the equipment less the cash discount.
- Smith company purchases equipment for a contract price of $300,000 with terms of 2/10 n 30. They incur sales tax of $18,000 transportation costs of $5,000 and installation costs of $15,000 and uninsured damages of $7,000. Prepare the entry assuming the c
- Equipment was purchased for $158,500. Freight charges amounted to $4,500, and there was a cost of $14,000 for building a foundation and installing the equipment. It is estimated that the equipment wil
- Chong Lai Company acquired a new machine in order to expand its productive capacity. The costs associated with the machine purchase were as follows: Purchase price $10,000 Installation costs 500 Cost of initial testing 600 Sales tax 750 1. Make th
- Martha Company incurred the following expenditures to buy a new machine: Invoice $ 29,000 less 11% cash discount. Freight charges $ 510 Assembly charges $ 1,000 Special base to support-machine $ 505
- Which of the following would not be considered part of the cost of equipment recently purchased? A. Sales tax B. Transportation charges C. Installation and setup charges D. All three are capitalized c
- Samantha Company purchased equipment for $36,000. Sales tax on the purchase was $2,400. Other costs incurred were freight charges of $600, repairs of $350 for damage during installation, and installation costs of $675. What is the cost of the equipm
- Which of the following would not be included in the cost of a new machine? A. Freight cost incurred in having the machine delivered B. Sales tax paid on the new machine C. Cost of installing the machine D. All of the above would be included in the cost o
- JJ Enterprises recently purchased a machine for $50,000 that it uses 90% in production. Transportation costs to bring the machine to the factory were $2,000. It estimates the machine will be useful fo
- Crane Company purchased equipment and these costs were incurred: Cash price $65,000 Sales taxes 4,100 Insurance during transit 700 Installation and testing 950 Total costs $70,750 Crane will record the acquisition cost of the equipment as: A) $65,000. B
- These expenditures were incurred by Shumway Ltd. in purchasing land: cash price $54,820; legal fees $2,210; removal of old building $5,170; the cost of clearing and grading $4,430; installation of fen
- The Collins Corporation purchased office equipment at the beginning of 2014 and capitalized a cost of $2,270,000. This cost included the following expenditures: Purchase price $2,030,000 Freight charges 48,000 Installation charges 38,000 Annual maintenanc
- Circle Co. purchased a piece of equipment by paying $10,000 cash. There was shipping cost of $1,200 and a renovation cost of $3,200 to the building to get the space ready for the installation. There w
- King Transportation purchases many pieces of office furniture with an individual cost below $200 each. King chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance she
- Mega purchases five machines for $66,000, not including sales tax of $1,500. The cost to transport the machines across the country is $6,300. In preparing the machines for use, Mega incurs labor cost of $2,000 and materials of $1,700. The cost of electric
- Which of the following items is not considered capitalisable cost of property, plant and equipment? a) Freight costs. b) Import duties. c) Trade discount. d) Installation costs.
- Peak, Inc. acquired a machine that involved the following expenditures and related factors: Gross invoice price $27,200 Sales tax 1,760 Cash discount taken 544 Freight 960 Assembly of machine 800 Installation of machine 1,200 Training of employees before
- Which of the following would not be considered part of the cost of machinery and equipment? a. In-transit insurance costs b. Delivery charges c. Installation costs d. Repairs and maintenance after start-up
- The cost of a capital asset: a. is limited to the purchase price only b. includes all costs associated with acquiring the asset c. excludes installation fees d. includes routine expenses
- 1. If the merchandise costs $4,000, insurance in transit costs $200, tariff costs $50, processing the purchase order by the purchasing department costs $35, and the company receiving dock personnel co
- Which of the following would not be considered a part of the cost of machinery and equipment? (a) In-transit insurance costs (b) Delivery charges (c) Installation costs (d) Repairs and maintenance after startup.
- State with reasons whether the following items are capital or revenue: a) Purchase of land. b) Installation of Plant and Machinery c) Expenditure incurred during the erection of Machinery. d) Commission paid to a worker.
- Equipment was purchased for $200,000. Freight charges amounted to $10,000 and there was a cost of $15,000 for building a foundation and installing the equipment. It is estimated that the equipment wil
- What are the project's operating cash flows in Years 1, 2, and 3? You have been asked to evaluate the proposed acquisition of a new clinical laboratory test system. The system's price is $50,000, and it will cost another $10,000 for transportation and ins
- If the merchandise costs $5,000, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $25, and the company receiving dock personnel costs $20, what is the total cost charged to the merchandise
- Presto Company purchased equipment and these costs were incurred: Cash price: $27,500 Sales taxes: $1,800 Insurance during transit: $320 Installation and testing: $430 Total costs $30,050 How will Presto record the acquisition cost of the equipment?
- The following overhead cost information is available for Millennium Inc. for 2012: Activity Allocation Base Overhead Cost Purchasing Number of purchase orders $450,000 Machine setups Number of setups
- Which of the following costs would be excluded from the acquisition cost of equipment purchased from a supplier? a. The cost to widen an entrance in the building to bring the equipment into the facilities. b. Cost to install the equipment. c. A purchas
- The Collins Corporation purchased office equipment at the beginning of 2014 and capitalized a cost of $2,000,000. This cost included the following expenditures: Purchase price $1,850,000 Freight cha
- The process of assigning costs to a particular product or service is best called. a. a job costing system. b. a cost assigned system. c. a cost allocation system. d. a process costing system.
- Merry Co. purchased a machine costing $125,000 for its manufacturing operations and paid shipping costs of $20,000. Merry spent an additional $10,000 testing and preparing the machine for use. What amount should Merry record as the cost of the machine? A.
- What is the terminal cash flow at the end of Year 3? You have been asked to evaluate the proposed acquisition of a new clinical laboratory test system. The system's price is $50,000, and it will cost another $10,000 for transportation and installation. Th
- A machine was purchased in 20X6 to make experimental boards. The machine is still being used in the manufacture of the new board. What term is used to describe the cost of this machine in 20X9? 1) Opportunity cost. 2) Sunk cost. 3) Differential cost. 4) P
- Automatic Transmissions, Inc., had the following estimates for its new gear assembly project: price = $1,230 per unit; variable cost = $450 per unit; fixed costs = $4.96 million; quantity = 86,000 uni
- Which of the following would be considered a sunk cost? a) warehouse lease expense b) equipment rental for the production area c) purchase price of new equipment d) net book value of equipment that has no market value
- Oriole Company purchased equipment and these costs were incurred: Cash price $82,000 Sales taxes 3,400 Insurance during transit 770 Installation and testing 840 Total costs $87,010 Oriole will record the acquisition cost of the equipment as: a. $82,000. b
- Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $185,000; Real estate commissions $ 15,000 Legal fees $700; Expenses of clearing the land $2,00; Expenses to remove old building $4,000.
- All of the following will be included in the cost of a fixed asset except _____. a. the cost of installing equipment b. mistakes in installation c. freight costs d. direct costs of new construction
- Worthington Chandler Company purchased equipment for $10,000. Sales tax on the purchase was $500. Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225. What is the cost of the eq
- Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $163,700, including freight and installation. Henrie's has estimated th
- Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $180,000 with terms of 5/15, n/45. Payment was made within the discount period. Shipping costs were $4,600, which included $200 for insurance in transit. Installation costs totaled $12,000,
- Grab Manufacturing Co. purchased a ten-ton draw press at a cost of $178,000 with terms of 2/15, n/45. Payment was made within the discount period. Shipping costs were $4,000, which included $250 for insurance in transit. Installation costs totaled $11,800
- Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $179,000 with terms of 3/15, n/45. Payment was made within the discount period. Shipping costs were $4,200, which included $390 for insurance in transit. Installation costs totaled $12,200
- Of the following costs related to the development of natural resources, which one is not a part of depletion cost? a. Acquisition cost of the natural resource deposit b. Exploration costs c. Tangible equipment costs associated with machinery used to extra
- Which of the following would not be included in the acquisition cost of a building? A. An apportioned amount of the purchase cost when both the land and building are acquired in a basket purchase. B. The cost of paving the parking lot and outdoor lighti
- Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the installation costs $20,000. Additional costs are $4,000 for delivery and $13,700 for sales tax. During the installation, a comp
- Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $185,000. The electrical work required for the installation costs $19,425. Additional costs are $3,885 for delivery and $13,330 for sales tax. During the installation, a comp
- The Collins Corporation purchased office equipment at the beginning of 2014 and capitalized a cost of $2,270,000. This cost included the following expenditures: Purchase price $2,030,000 Freight char
- Which of the following would not be included in the cost of purchased equipment? a. Taxes paid on the equipment b. Shipping costs to have equipment delivered c. Insurance premiums for the next month of use d. Installation costs of equipment
- List three types of costs subsequent to the acquisition of property, plant, and equipment.
- The following costs were incurred by Shumway Company in purchasing land: Cash price $84,000 Removal of the old building $5,200 Legal fees $3,000 Clearing and grading $3,500 Installation of a fence $3,
- Strike Bowling installs automatic scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $8,000. Additional costs are $3,000 for delivery and $12,600 for sales tax. During the installation, a compo
- Merry Co. purchased a machine costing $125,000 for its manufacturing operations and paid shipping costs of $20,000. Merry spent an additional $10,000 testing and preparing the machine for use. What
- Once the equipment has been installed and placed in operation, subsequent expenditures relating to this equipment are frequently thought of as repairs or general maintenance and, hence, chargeable to operations in the period in which the expenditure is ma
- All of the following costs would be included in inventory EXCEPT for: A. taxes paid on the purchase price B. advertising C. insurance while in transit D. freight minus-in
- Machine lubricant used on processing equipment in a manufacturing plant would be classified as a: a. period cost/overhead b. product cost/overhead c. product cost/SG&A d. period cost/SG&A
- The cost of a new windshield wiper on a delivery vehicle would be classified as _____. a. a capital expenditure b. an expense c. part of the cost of goods sold d. an unusual and infrequent expense
- A company purchased property for a building site. The costs associated with the property are given below. Purchase price = $175,000 Real estate commissions = $15,000 Legal fees = $800 Expenses of clearing the land = $2,000 Expenses to remove old building
- Your firm is considering a project to produce new whatchamacallits. The project will require new equipment at a cost of $150,000. Shipping and installation will be $25,000 and initial training required before the project starts will cost $20,000. The equi
- The cost of setups would be considered a: A. Unit Level Cost B. Product Level Cost C. Batch Level Cost D. Facility Level Cost
Explore our homework questions and answers library
Browse
by subject