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What is the total cost to be capitalized

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Question - Extra Corporation is installing a new plant at its production facility. It has incurred these costs:

Purchase price of plant P2, 500,000

Initial delivery and handling costs 200,000

Cost of site preparation 600,000

Consultants used for advice on the acquisition of the plant 700,000

Estimated dismantling cost to be incurred after 7 years 300,000

Operating losses before commercial production 400,000

Required - What is the total cost to be capitalized?

Reference no: EM132704652

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