Determine the capitalized cost of the equipment


Question:

Mad Hatter Enterprises purchased new equipment for $365,000, FOB shipping point. Other costs connected with the purchase were as follows:

State sales tax $29,200 Freight cost $5600 Insurance while in transit $800 Insurance after equipoment placed inservice $1200 Installation Cost $2000 Testing, including $300 of spoilage $700

Required:

Determine the capitalized cost of the equipment.

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Accounting Basics: Determine the capitalized cost of the equipment
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