Holiday Laboratories purchased a high speed industrial centrifuge at a cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is:

Holiday Laboratories purchased a high speed industrial centrifuge at a cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is:

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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Extra Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is Group of answer choices P5,200,000 P4,980,000 P4,900,000 P4,200,000
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