Question

Martinez Co. recently installed some new computer equipment. To prepare for the installation, Martinez had some electrical work done in what was to become the server room, costing $19,400. The invoice price of the server equipment was $196,000. Three printers were also purchased at a cost of $2,100 each. The software for the system was an additional $45,100. 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 four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $13,200 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 Martinez follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%). (b) Assume that Martinez 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 O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.) Cost Server equipment $ Printers $ Software $

          Martinez Co. recently installed some new computer equipment. To prepare for the installation, Martinez had some electrical work done in what was to become the server room, costing $19,400. The invoice price of the server equipment was $196,000. Three printers were also purchased at a cost of $2,100 each. The software for the system was an additional $45,100. 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 four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost $13,200 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 Martinez follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%).
(b) Assume that Martinez 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 O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.)
Cost
Server equipment
$
Printers
$
Software
$

Martinez Co. recently installed some new computer equipment. To prepare for the installation, Martinez had some electrical work done in what was to become the server room, costing 19,400. The invoice price of the server equipment was196,000. Three printers were also purchased at a cost of 2,100 each. The software for the system was an additional45,100. 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 four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, it cost 13,200 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 Martinez follows IFRS, and that any allocation of common costs is done to the nearest 1% (e.g., 80%, 6%, 14%).
(b) Assume that Martinez 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 O decimal places, e.g. 52% and final answers to O decimal places, e.g. 5,275.)
Cost
Server equipment
Printers
Software

Added by Joseph D.

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