On January 1, 20X7 Deigham Entity (DE) acquired an item of equipment for $780,000, inclusive of $40,000 non-refundable purchase taxes. In addition, the DE incurred the following costs: transportation costs of $15,000; installation costs of $24,000; modification costs to the item to be capable of operating as intended by management-$10,000; training costs of $35,000 (including the cost of external expert-$10,000); testing costs (materials-$6,000, cost of materials recovered from the sale of the scrapped output-$2,000; labor-$7,000; depreciation of plant and equipment used in making modifications-$3,000); and the cost of administrative personnel involved in the acquisition-$10,000. At the end of the equipment's 10-year useful life the entity is required to dismantle the equipment and restore the environment. The present value of the cost of environmental restoration is estimated at $80,000.
-What is the cost of the equipment at initial recognition?

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The Answer of On January 1, 20X7 Deigham Entity (DE) acquired an item of equipment for $780,000, inclusive of $40,000 non-refundable purchase taxes. In addition, the DE incurred the following costs: transportation costs of $15,000; installation costs of $24,000; modification costs to the item to be capable of operating as intended by management-$10,000; training costs of $35,000 (including the cost of external expert-$10,000); testing costs (materials-$6,000, cost of materials recovered from the sale of the scrapped output-$2,000; labor-$7,000; depreciation of plant and equipment used in making modifications-$3,000); and the cost of administrative personnel involved in the acquisition-$10,000. At the end of the equipment's 10-year useful life the entity is required to dismantle the equipment and restore the environment. The present value of the cost of environmental restoration is estimated at $80,000.
-What is the cost of the equipment at initial recognition?

On January 1, 20X7 Deigham Entity (DE) Acquired an Item