Response to the following problem:
Real good Hospital purchased a new item of equipment for $800 on January 1, 20X1. The equipment has an estimated salvage value of $80 and an estimated useful life of eight years. The equipment, which was depreciated by the straight-line method, was traded on January 1, 20X4 for a similar item of equipment. Cash "boot" of $420 was paid to effect the trade. The old equipment had a fair value of $530; the new equipment had a fair value of $950.
Required: What is the cost of the new equipment?