QUESTION ONE

Sally Ltd purchased a machine for wool manufacturing on 30 June 2010 for $1,850,000. Additionally, Sally incurred the following expenses:

$ 50,000 for assembling and testing the machine;

$ 60,000 for estimated dismantling costs;

$ 10,000 for first year maintenance;

$ 40,000 for site preparation costs.

REQUIRED:

1. Determine the cost of acquisition of the machine.