Equipment Was Purchased for $45,000 Plus $2,000 in Freight Charges

question 62

Multiple Choice

Equipment was purchased for $45,000 plus $2,000 in freight charges. Installation costs were $1,500 and sales tax totaled $1,000. Hiring a special consultant to provide advice during the selection of the equipment cost $3,000. What is this asset's depreciable basis?

• A) $51,500
• B) $49,500
• C) $48,500
• D) $52,500

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Definitions:

Operations to Net Income

An analysis or measure that illustrates how operating activities contribute to a company's net income.

Intracompany Comparisons

Intracompany comparisons involve analyzing the financial performance and operational efficiencies within different segments or departments of the same company.

Intercompany Comparisons

The evaluation and analysis of financial statements and performance between different departments or subsidiaries within the same company.

Consistency

An accounting principle that requires companies to apply the same accounting methods and procedures from period to period.