Questions -

Q1. Jose Company purchased a used delivery truck paying $8600 cash and signing a Note Payable for $15,000. Before being placed in service, the firm spent $3,000 on the truck. 40% of this amount was to repaint the truck to make its appearance suitable and the remainder was to install air conditioning. What amount represents the cost basis of this truck for subsequent depreciation purposes?

Q2. Without prejudice to your answer for the above requirement, assume the $3000 was spent on the truck after it had been owned and used for four years. 40% of this amount was to repaint the truck to make its appearance suitable and the remainder was to install air conditioning. The paint cost was to return the asset to its condition when purchased. Ignoring any depreciation that might have been taken on the truck since it was acquired, what amount represents the cost basis of this truck for subsequent depreciation purposes?