Question

Equipment was purchased for $45,000 plus $2,000 in freight charges. Installation costs were $1,500 and sales tax totaled $1,000. Hiring a special consultant to provide advice during the selection of the equipment cost $3,000. What is this asset's depreciable basis

Answer 1

Asset's depreciable basis = $49,500

Step-by-step explanation:

Given:

Equipment purchased cost = $45,000

Freight charge = $2,000

Installation costs = $1,500

Sales tax = $1,000

Consult fee = $3,000

Find:

Asset's depreciable basis

Computation:

Asset's depreciable basis not include consultation fee.

Asset's depreciable basis = Equipment purchased cost + Freight charge + Installation costs + Sales tax

Asset's depreciable basis = $45,000 + $2,000 + $1,500 + $1,000

Asset's depreciable basis = $49,500