Dane ASA bothpurchases and constructs various equipment it uses in its operations. The followingitems for two different types of equipment were recorded in random order during thecalendar year 2019. PurchaseCash paid for equipment, including sales tax of €5,000 €105,000Freight and insurance cost while in transit 2,000Cost of moving equipment into place at factory 3,100Wage cost for technicians to test equipment 6,000Insurance premium paid during first year of operation on this equipment 1,500Special plumbing fixtures required for new equipment 8,000Repair cost incurred in first year of operations related to this equipment 1,300ConstructionMaterial and purchased parts (gross cost €200,000; failed to take 1% cashdiscount)€200,000Imputed interest on funds used during construction (share financing) 14,000Labor costs 190,000Allocated overhead costs (fixed—€20,000; variable—€30,000) 50,000Profit on self-construction 30,000Cost of installing equipment 4,400InstructionsCompute the total cost for each of these two types of equipment. If an item is notcapitalized as a cost of the equipment, indicate how it should be reported
Dane ASA both
purchases and constructs various equipment it uses in its operations. The following
items for two different types of equipment were recorded in random order during the
calendar year 2019.
Purchase
Cash paid for equipment, including sales tax of €5,000 €105,000
Freight and insurance cost while in transit 2,000
Cost of moving equipment into place at factory 3,100
Wage cost for technicians to test equipment 6,000
Insurance premium paid during first year of operation on this equipment 1,500
Special plumbing fixtures required for new equipment 8,000
Repair cost incurred in first year of operations related to this equipment 1,300
Construction
Material and purchased parts (gross cost €200,000; failed to take 1% cash
discount)
€200,000
Imputed interest on funds used during construction (share financing) 14,000
Labor costs 190,000
Allocated
Profit on self-construction 30,000
Cost of installing equipment 4,400
Instructions
Compute the total cost for each of these two types of equipment. If an item is not
capitalized as a cost of the equipment, indicate how it should be reported
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