Reference no: EM132725124

Problem 1: LOQUACIOUS TALKATIVE Co. acquired a factory equipment overseas on cash basis for ?400,000. Additional costs incurred include the following: commissions paid to brokers for the purchase of the equipment, ?20,000; import duties of ?100,000; non-refundable purchase taxes of ?40,000; freight cost of transferring the equipment to LOQUACIOUS' premises, ?4,000; costs of assembling and installing the equipment, ?8,000; costs of testing the equipment, ?6,000; administration and other general overhead costs, ?16,800; and advertisement and promotion costs of the new product to be produced by the equipment, ?15,200. The samples generated from testing the equipment were sold at ?2,000. How much is the initial cost of the equipment?