1. SBR Co. recently installed some new computer equipment. To prepare for the installation, SBR had some electrical work done in what was to become the server room, costing $19,000. The invoice price of the server equipment was $195,000. Three printers were also purchased at a cost of $2,000 each. The software for the system was an additional $45,000. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $12,000 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,750. Assume that SBR follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%)

(a)Should the items listed above be capitalized together in a single account (i.e. "Computer system"), or should different components of the system be capitalized separately? If so, how would you recommend to split the components, and why?

2.Sweet Enterprises purchased a new piece of equipment for its factory under a new government incentive program. The program was intended to encourage companies to invest in new, innovative technologies. The new piece of equipment purchased by Sweet qualified for a government grant of $20,400. The equipment itself cost $149,000, and had an estimated useful life of ten years.

Assuming that Sweet uses the cost reduction method, prepare the journal entries to record the purchase of the equipment and the receipt of the government grant.