Tyler buys 3 pieces of machinery from the machine store. Because he bought 3 pieces in...
Tyler buys 3 pieces of machinery from the machine store. Because he bought 3 pieces in a bundle he was provided with a discount of $3,500 on the entire purchase. What is his cost basis in each machine?
Machine 1: $5,000
Machine 2: $10,000
Machine 3: $7,500
Homework Answers
| Total Cost of Machinery= 5000+10000+7500=22500 |
| Total Discount = $3500 |
| Cost basis for Machine-1= Machine Cost - Allocated Depreciation |
| ={ $5000- (3500/22500)X 5000}=4222 |
| Cost basis for Machine-2= Machine Cost - Allocated Depreciation |
| ={ $10000- (3500/22500)X 10000}=$8444 |
| Cost basis for Machine-3= Machine Cost - Allocated Depreciation |
| ={ $7500- (3500/22500)X 7500}=$6333 |
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