Determine the cost basis for the new machine

Reference no: EM132065988

Question: 1. Lanier Corporation purchased an automatic hole-punching machine priced at $62,500. The vendor's invoice included a sales tax of $3,263. Lanier also paid the inbound transportation charges of $725 on the new machine, as well as the labor cost of $2,150 to install the machine in the factory. In addition, Lanier had to prepare the site at a cost of $3,500 before installation. Determine the cost basis for the new machine for depreciation purposes.

2. Continuing from question 1, Suppose Lanier purchased the hole-punching press by trading in a similar machine and paying cash for the remainder. The trade-in allowance is $5,000, and the book value of the hole-punching machine that was traded in is $4,000. Determine the cost basis for this hole-punching press.

Reference no: EM132065988

Questions Cloud

What is book value per share of equity for firm : What are the consequences of bank failure. What is the book value per share of equity for a firm with the following:

What are the consequences of the development : What are the consequences of the development of export-oriented modernized agriculture and agribusiness in Southeast Asia?

What is the value of a share of common stock today : Suppose Nabisco Corporation just issued a dividend of $1.49 per share yesterday. Subsequent dividends will grow at a constant rate of 06.20% indefinitely.

What happens when air parcel subside within the tropopsphere : Explains what happens to an air parcel as it rises within the troposphere. What processes are at work and what types of phenomena result?

Determine the cost basis for the new machine : Lanier Corporation purchased an automatic hole-punching machine priced at $62,500. The vendor's invoice included a sales tax of $3,263.

The IRR on investment is the required return : The IRR on an investment is the required return that results in a zero NPV when it is used as the discount rate.

Pollution exporting ethical : Pollution exporting is certainly effective in cutting down on pollution in the country that adopts the practice. But is pollution exporting ethical?

Consequences of the declining populations : Please explain some of the consequences of the declining populations in countries like South Korea and Japan.

How much more do you need to save at the end of every year : You currently have $3,564 in a retirement savings account that earns an annual return of 09.00%. You want to retire in 42 years with $1,000,000.

User Account

All Pages