Question
Cullumber Corporation acquired new equipment at a cost of $108,000 plus 9% provincial sales tax and 6% GST. (GST is a recoverable tax.) The company
Cullumber Corporation acquired new equipment at a cost of $108,000 plus 9% provincial sales tax and 6% GST. (GST is a recoverable tax.) The company paid $1,710 to transport the equipment to its plant. The site where the equipment was to be placed was not yet ready and Cullumber Corporation spent another $430 for one months storage costs. When installed, $330 in labour and $220 of materials were used to adjust and calibrate the machine to the companys exact specifications. The units produced in the trial runs were subsequently sold to employees for $350. During the first two months of production, the equipment was used at only 17% of its capacity. Labour costs of $3,200 and material costs of $2,300 were incurred in this production, while the units sold generated $5,700 of sales. Cullumber paid an engineering consulting firm $10,300 for its services in recommending the specific equipment to purchase and for help during the calibration phase. Borrowing costs of $580 were incurred because of the one-month delay in installation. Determine the capitalized cost of the equipment.
Capitalized cost of the equipment $ ??
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