Determining Amount of PP&E to Capitalize AMP Corporation purchased new manufacturing equipment with an invoice...
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Determining Amount of PP&E to Capitalize AMP Corporation purchased new manufacturing equipment with an invoice cost of $50,000, plus sales tax of 6% on the selling price. AMP also incurred a freight charge of 10% of the selling price to obtain the equipment and paid an outside consultant $500 for installation of the equipment. AMP retained the services of the consultant for an additional few days for $1,000 to help employees train on the equipment's operations. Insurance premiums increased by $300 for the year related to the equipment usage. The company also received $1,000 for the residual value of the machine that was replaced. Determine the amount AMP should capitalize for equipment related to this purchase. $ 105,300 x
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