Please use the data in the class example problem as the basis for answering this question.

What amount is the proper initial cost of the new machine?

Koch, Inc. data for Ch. 9 Review Questions Koch, Inc. had the following balances on its 12/31/18 Balance Sheet. Current assets Long-term assets $25,000 Total assets S100,000 Current liabilities Long-term liabilities $10,000 Total liabilities S 60,000 Common Stock Retained earnings Total stockholders' equity 15,000 25,000 40,000 Total liabilities & stockholders equity S100,000 El Gato Corporation data for Ch. 9 Review Questions On January 6, 2018, the El Gato Corporation purchased a tract of land for a factory site for $500,000. An existing building on the site was demolished and the new factory was completed on October 11,2018. Additional cost data are shown below: Title search and transfer documents Construction cost of new building Real estate and attorney fees Fines (related to demolition) Architects fees Cost to demolish old building Salvage recovery from old building $ 1,500 800,000 6,200 500 9,000 52,000 (4,000)