Adjust Basis For Depreciation And Improvements Practice Test

A corporation purchased equipment for $160,000 and capitalized $4,000 of freight costs. The corporation has claimed $90,000 of depreciation to date. This year, it performs a capital upgrade to the equipment costing $25,000. Calculate the new basis after depreciation expenses are considered.

A corporation purchased equipment for $88,000 and capitalized $2,000 of delivery costs. The corporation has claimed $30,000 of depreciation to date. In the current year, it adds a capital improvement costing $14,000. Calculate the new basis after depreciation expenses are considered.