Beston Ltd purchased a new item of equipment from a Japanese manufacturer costing $225,000 on 1 July 2017. Beston Ltd also incurred the following cost in relation to the purchase of the equipment during the financial year ending 30 June 2018:

• $15,600 on import duties and taxes
• $7,400 on transportation to Beston Ltd.s factory
• $18,000 on installation cost of equipment
• $2,000 on painting the equipment navy colour

The equipment is carried at cost and has 10 years of useful life and $36,000 residual value.

REQUIRED:

Determine the cost of acquisition of the new equipment in accordance with AASB116: Property, Plant and Equipment. Explain the reason for including and excluding the cost listed above.