Cullumber Co. recently installed some new computer equipment. To prepare for the installation, Cullumber had...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Cullumber Co. recently installed some new computer equipment. To prepare for the installation, Cullumber had some electrical work done in what was to become the server room, costing $23,700. The involce price of the server equipment was $191,000. Three printers were also purchased at a cost of $1,900 each, The software for the system was an additional $43,000. 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 fouryear useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $12,900 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 $9,850. Assume that Cullumber follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g, 80\%,6\%,14\%). (b) Assume that Cullumber 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 0 decimal places, e.s. 52% and final answers to 0 decimal places, es. 5, 275.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!