A machine is purchased for $70,000. The transportation costs were $4,000, installation costs were $1,000 and taxes on the purchase price were $700. The cost basis of the machine is:

Question

Quizplus · Accepted Answer

The cost basis of the machine is the total amount spent on acquiring and preparing the machine for its intended use. This includes the purchase price of $70,000 plus the transportation costs of $4,000, installation costs of $1,000, and taxes of $700, which totals to $75,700. Therefore, the correct choice is C.

A Machine Is Purchased for $70,000