QUESTION 1 Lowery Inc. purchased new plant equipment on January 1, 2020. The company paid $920,000 for the equipment, $62,000 for transportation of the equipment, and $10,000 for insurance on the equipment while it was being transported. The company also estimates that over the equipments useful life it will require additional power, which will cause utility costs to increase $90,000. The equipment has an estimated salvage value of $50,000. What amount should the company capitalize for this equipment on January 1, 2020? What is the depreciation base of this equipment? What amount will be depreciated over the life of this equipment? Required: After completing Exercise 9-1 provide the following answers: From Part a, what amount should the company capitalize for this equipment on January 1, 2020?

Use the information from Question 1 to answer Question 2.

From Part b, what is the depreciation base of this equipment?