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Harry purchases a business. The purchase agreement stipulates the following: -Buyer pays $5,000 cash -Buyer...

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Accounting

Harry purchases a business. The purchase agreement stipulates the following:

-Buyer pays $5,000 cash

-Buyer assumes Seller's personal debt of $7,000

-Buyer receives $10,000 in receivables from the business which remains in the business.

-Seller pays Buyer's closing costs of $1,000

-Buyer gives Seller a car with a basis of $2,000 and a FMV of $5,000

What is Harry's basis in his new business?

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