Mad Hatter Enterprises purchased new equipment for $365,000, terms f.o.b. shipping point. Other costs connected with the purchase were as follows:
|
State sales tax |
$29,200 |
|
Freight costs |
$5,600 |
|
Insurance while in transit |
$800 |
|
Insurance after equipment placed in service |
$1,200 |
|
Installation costs |
$2,000 |
|
Insurance for the first year of operation |
$2,400 |
|
Testing |
$700 |
Required: Determine the capitalized cost of the equipment.
|
$365,000 |
||
|
$402,500 |
||
|
$406,900 |
||
|
$403,300 |