Question

Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $25,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,270; paint to match the other fleet vehicles at a cost of $1,440; registration costs of $2,970, which included $2,750 of sales tax and an annual registration fee of $220; wash and detailing for $121; and an engine tune-up for $327.

Required:
What is Joseâs cost basis for the delivery van?

Answer 1

$30,710

Step-by-step explanation:

Calculation for Jose cost basis for the delivery van

Van Winning bid $25,250

Add Shipping costs of $1,270

Add Paint to match the other fleet vehicles $1,440

Add Sales tax $2,750

Basis for the delivery van $30,710

($25,250 + $1,270 + $1,440 + $2,750 )

Therefore Jose cost basis for the delivery van was $30,710