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Why is it wrong? Sandhill Corporation acquired new equipment at a cost of $109,000 plus 7% provincial sales tax and 5% GST. (GST is a
Why is it wrong?
Sandhill Corporation acquired new equipment at a cost of $109,000 plus 7% provincial sales tax and 5\% GST. (GST is a recoverable tax.) The company paid $1,990 to transport the equipment to its plant. The site where the equipment was to be placed was not yet ready and Sandhill spent another $590 for one month's storage costs. When installed, $400 in labour and $270 in materials were used to adjust and calibrate the machine to the company's exact specifications. The units produced in the trial runs were subsequently sold to employees for $490. During the first two months of production, the equipment was used at only 50% of its capacity. Labour costs of $3,900 and material costs of $3,400 were incurred in this production, while the units sold generated $5,800 of sales. Sandhill paid an engineering consulting firm $11,600 for its services in recommending the specific equipment to purchase and for help during the calibration phase. Borrowing costs of $550 were incurred because of the one-month delay in installation.. Determine the capitalized cost of the equipment
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