Question

Problem 10-38 (LO 10-1) Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $32,000. In addition, Jose Incurred the following expenses before using the van: shipping costs of $690; paint to match the other fleet vehicles at a cost of $1,380, registration costs of $3,493, which included $3,250 of sales tax and an annual registration fee of $243; wash and detailing for $86, and an engine tune-up for $343. What is Jose's cost basis for the delivery van? Cost basis

Answer 1

Cost basis

= Purchase price 32,000 + Shipping cost 690 + paint 1380 + Sales tax 3250

= 32000+690+1380+3250

= 37,320