Janey Purchased Machinery on April 8th of the Current Year

question 56

Essay

Janey purchased machinery on April 8th of the current year. The relevant costs for the year are as follows: machinery for $10,000, $800 shipping, $50 for delivery insurance, $500 for installation,$750 for sales tax, $150 for the annual tune up, and $200 of property taxes (an annual tax on business property). What is Janey's tax basis for the machinery?

---

Definitions:

Materials

Basic components or raw substances used in manufacturing processes or production.

Generating Revenues

Generating revenues involves engaging in activities that bring income to a business, such as selling goods or providing services.

Cost

The total amount of money spent on the production, acquisition, or maintenance of goods and services.

Direct Labor Cost

The total expense that a company incurs for employees who directly work on manufacturing products or performing services, including wages, benefits, and payroll taxes.