Chapter 16 Problem 16-15
Cost paid (896,000 – 96,000) 800,000
Cost of transporting machine 30,000
Installation cost 50,000
Testing cost 40,000
Safety rails and platform 60,000
Water device 80,000
Cost of adjustment 75,000
Estimated dismantling cost 65,000
Total cost of machine 1,200,000
Note that the estimated dismantling cost is capitalized because the company has a present obligation as required by contract. In the absence of a present obligation, the estimated dismantling cost is not capitalized.
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