Chapter 10, Problem 4E

To determine

Asset acquisition and self-construction: Assets can be acquired or self-constructed. Assets can be acquired for cash or in exchange of another asset, exchange of shares, or signing a note payable. Assets can be bought for a lump sum payment too. When assets are purchased, in addition to the purchase price any expenses incurred before the asset is put to use is capitalized. This includes freight charges, installation charges, and so forth. Sometimes assets are self-constructed. All expenses incurred in the construction of the asset and making the asset fit for use is capitalized. Costs included planning costs like drawings, materials, and labor cost and allocated fixed cost.

To compute: To compute the total cost for each of these two pieces of equipment.