(Examining historical cost, LO 4) For each of the following situations, determine what amount Sangudo Ltd. (Sangudo) should record as the cost of the asset. Explain your reasoning and indicate any practical problems that may be influencing your decisions.

a. Sangudo purchased new computer equipment for its head office. The equipment itself cost $250,000. Delivery, installation, and necessary renovations to the office cost an additional $175,000. Staff training cost $10,000. Taxes were

$20,000.

b. Sangudo purchased inventory at a list price of $25,000. Sangudo paid for the inventory early so it received a 5% discount from the list price.

c. Sangudo purchased inventory for $30,000. Delivery charges were $2,000. The inventory was stored in a warehouse on shelving that cost $10,000. Utilities for the warehouse for the year this inventory was stored were $25,000. The manager of the warehouse earns $40,000 per year and wages for warehouse workers are $145,000 per year. ;