Question

Bobby purchased a new machine for use in his business. He incurred the following costs with the purchase: $3,300 cash paid, $12,500 financed, a $450 delivery charge, and a $330 installation charge. Bobby's basis in the machine is __________.

Answer 1

Answer:

$16,580

Explanation:

Bobby's basis in the machine is the amount of cash paid by Bobby for the machine.

Given that,

incurred costs with the purchase:

$3,300 cash paid

$12,500 financed

$450 delivery charge

$330 installation charge

Bobby's basis in the machine:

= Cash paid + Amount financed + Delivery charge + Installation charge

= $3,300 + $12,500 + $450 + $330

= $16,580