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Sandhill Manufacturing Inc. is installing a new plant at its production facility. It has incurred these costs: Cost of the manufacturing plant (cost per suppliers
Sandhill Manufacturing Inc. is installing a new plant at its production facility. It has incurred these costs:
Cost of the manufacturing plant (cost per suppliers invoice plus non-recoverable taxes) | $2,450,000 | |
Initial delivery and handling costs | 208,000 | |
Cost of site preparation | 610,000 | |
Consultants used for advice on the acquisition of the plant | 103,000 | |
Interest charges paid to supplier of plant (indirect financing charges for amounts borrowed by supplier) | 208,000 | |
Estimated dismantling costs to be incurred after seven years | 308,000 | |
Operating losses before commercial production | 408,000 |
Determine which costs Sandhill Manufacturing Inc. can capitalize in accordance with IAS 16.
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