Question

A building with an appraisal value of $137,732 is made available at an offer price of $156,512. The purchaser acquires the property for $35,983 in cash, a 90-day note payable for $22,273, and a mortgage amounting to $56,052. The cost basis recorded in the buyer's accounting records to recognize this purchase is

Answer 1

the cost basis is $114,308

Step-by-step explanation:

The computation of the cost basis recorded in the buyer accounting records is shown below:

The Cost basis in buyer's accounting records is

= Cash payment + 90-day note payable + Mortgage amount

= $35,983 + $22,273 + $56,052

= $114,308

Hence, the cost basis is $114,308

We simply applied the above formula so that the correct value could come

And, the same is to be considered