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Jumbo Electronics Company. acquired new machinery that will significantly reduce its energy costs for manufacturing. Costs incurred include: Cost of the new machinery (including $150,000

Jumbo Electronics Company. acquired new machinery that will significantly reduce its energy costs for manufacturing. Costs incurred include:

Cost of the new machinery (including $150,000 of refundable tax) $5,150,000

Transportation and set up cost 195,000

Trade discount received 250,000

Training course for staff in new machinery 180,000

Import duty on the new machinery 450,000

Initial testing cost of new machinery 300,000

Losses incurred while other parts of the factory shut down during testing the new machinery 130,000

Cost to dismantle the machinery after 15 years 165,000

Professional Fees paid to make the technology suitable 100,000

Proceeds from the sales of test-run products 167,000

Required: What is the total cost that can be capitalized as per IAS 16. [11 Marks]

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