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Pearl Co. recently installed some new computer equipment. To prepare for the installation, Pearl had some electrical work done in what was to become the server room, costing $20,600. The invoice price of the server equipment was $195,000. Three printers were also purchased at a cost of $2,200 each. The software for the system was an additional $43,100. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $14,800 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,540. Assume that Pearl follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%). (b) Assume that Pearl decides to capitalize the following components of the computer system: server equipment, printers, and software. Calculate the amount to be capitalized for each of these asset groups. (Round percentage to O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.) Server equipment $ Printers 694 Software 57 54 Cost 184,716 1,656 10,840

Pearl Co. recently installed some new computer equipment. To prepare for the installation, Pearl had some electrical work done in what was to become the server room, costing $20,600. The invoice price of the server equipment was $195,000. Three printers were also purchased at a cost of $2,200 each. The software for the system was an additional $43,100. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $14,800 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,540. Assume that Pearl follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%). (b) Assume that Pearl decides to capitalize the following components of the computer system: server equipment, printers, and software. Calculate the amount to be capitalized for each of these asset groups. (Round percentage to O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.) Server equipment $ Printers 694 Software 57 54 Cost 184,716 1,656 10,840

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Current Attempt in Progress * Your answer is incorrect. Pearl Co. recently installed some new computer equipment. To prepare for the installation, Pearl had some electrical work done in what was to become the server room, costing $20,600. The invoice price of the server equipment was $195,000. Three printers were also purchased at a cost of $2,200 each. The software for the system was an additional $43,100. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $14,800 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,540. Assume that Pearl follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%). (b) Assume that Pearl decides to capitalize the following components of the computer system: server equipment, printers, and software. Calculate the amount to be capitalized for each of these asset groups. (Round percentage to O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.) Server equipment $ Printers Software $ LA LA Cost 184,716 1,656 10,840
Transcribed Image Text:Current Attempt in Progress * Your answer is incorrect. Pearl Co. recently installed some new computer equipment. To prepare for the installation, Pearl had some electrical work done in what was to become the server room, costing $20,600. The invoice price of the server equipment was $195,000. Three printers were also purchased at a cost of $2,200 each. The software for the system was an additional $43,100. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $14,800 for delivery. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,540. Assume that Pearl follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%). (b) Assume that Pearl decides to capitalize the following components of the computer system: server equipment, printers, and software. Calculate the amount to be capitalized for each of these asset groups. (Round percentage to O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.) Server equipment $ Printers Software $ LA LA Cost 184,716 1,656 10,840
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