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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.
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