Exercise 8-1 (Algorithmic) Acquisition Cost

On January 1, 2012, Pearl Inc. purchased a piece of equipment with a list price of $60,000. The following amounts were related to the equipment purchase:

Terms of the purchase were 2/10, net 30. Pearl paid for the purchase on January 8.

Freight costs of $1,000 were incurred.

A state agency required that a pollution control device be installed on the equipment at a cost of $2,500.

During installation, the equipment was damaged and repair costs of $4,000 were incurred.

Architect's fees of $7,600 were paid to redesign the work space to accommodate the new equipment.

Pearl purchased liability insurance to cover possible damage to the asset. The three-year policy cost $8,000.

Pearl financed the purchase with a bank loan. Interest of $3,000 was paid on the loan during 2012.

Required:

Determine the acquisition cost of the equipment.

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