Question

Which of the following costs should be included in the asset's original cost basis?

A. installation charges
B. repairs prior to putting the asset in service
C. sales tax
D. repairs after putting the asset in service
E. purchase price
F. Shipping charges
G. depreciation

Answer 1

The costs that should be included in the asset's original cost basis are the purchase price, installation charges, shipping charges, and sales tax.

Step-by-step explanation:

The costs that should be included in the asset's original cost basis are:

• Purchase price: The amount paid to acquire the asset.
• Installation charges: The costs incurred to set up and install the asset.
• Shipping charges: The costs to transport the asset to its intended location.
• Sales tax: The tax paid on the purchase of the asset.

Repairs prior to putting the asset in service and depreciation are not included in the asset's original cost basis, as they are considered expenses and not part of the initial purchase.