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# Establishing Cost Basis

15. A new machine with a purchase price of \$94,000, with transportation costs of \$8,000, installation costs of \$6,000, and special acquisition fees of \$2,000, would have a cost basis of _______.
\$ 96,000
\$108,000
\$102,000
\$110,000

16. A machine with a cost of \$65,000 has an estimated residual value of \$5,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?
\$8,000
\$20,000
\$12,000
\$21,667

#### Solution Preview

15. A new machine with a purchase price of \$94,000, with transportation costs of \$8,000, installation costs of \$6,000, and special acquisition fees of \$2,000, would have a cost basis of _______.
...

#### Solution Summary

A new machine with a purchase price of \$94,000, with transportation costs of \$8,000, installation costs of \$6,000, and special acquisition fees of \$2,000, would have a cost basis of

\$2.19