Dixon Ltd. has recently purchased a piece of specialized manufacturing equipment. The following costs were incurred when this equipment was installed in the company’s factory facilities in 2020.

Required: Determine the total cost of the equipment purchased. If an item is not capitalized, describe how it would be reported.

Transcribed Image Text:

Cash price paid, net of $1,600 discount, including $3,900 of recoverable tax $82,300 Freight cost to ship equipment to factory 3,300 Direct employee wages to install equipment 5,600 External specialist technician needed to complete final installation 4,100 Repair costs during the first year of operations 1,700 Materials consumed in the testing process Direct employee wages to test equipment 2,200 1,300 Costs of training employees to use the equipment 1,400 Overhead costs charged to the machine 5,300 Legal fees to draft the equipment purchase contract 2,400 Government grant received on purchase of the equipment (8,000) Insurance costs during first year of operations 900