Woodward Company purchased a new piece of equipment to use in its business. The details of the purchase and related costs are as follows:
| 1. |
Purchase price of equipment |
$70,000 |
| 2. |
Installation of equipment |
6,000 |
| 3. |
Freight costs (FOB shipping point) |
1,000 |
| 4. |
Annual salary of new employee hired to operate the equipment |
20,000 |
| 5. |
Increase in the annual cost of the fire and theft insurance policy to cover the new equipment
|
500 |
Determine the amount to be capitalized for this equipment.