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Calculate the cost of equipment that would be capitalized

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Reference no: EM132936058

Trouble Water Corporation paid $270,000 to purchase equipment for use in its manufacturing operations. In addition, Trouble Water Corporation incurred the following expenditures relating to the equipment:

  • $1,500 freight to have the equipment shipped to its manufacturing facility
  • $750 insurance while the equipment was in transit
  • $3,200 for special steel and concrete reinforcements used to house the equipment in the factory
  • $1,200 for a one-year insurance policy on the equipment after it has been installed
  • $300 to test the equipment before it is placed in service
  • $400 for maintenance costs during the first year of service

Required:

Problem 1: Calculate the cost of the equipment that would be capitalize on the balance sheet.

Reference no: EM132936058

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