Question

Collin Corp. purchases equipment to be used in manufacturing. Given the following expenditures during the year, calculate the amount capitalized as the cost of equipment.

1) 117,000
2) 121,000
3) 114,000
4) 108,000
5) 100,000

Answer 1

The total capitalized cost of the equipment purchased by Collin Corp. for manufacturing is the sum of the expenditures provided, which amounts to 560,000.

Step-by-step explanation:

The subject question asks to calculate the total amount Collin Corp. should capitalize as the cost of the equipment purchased for manufacturing purposes based on the provided expenditures. Assuming each expenditure listed (117,000; 121,000; 114,000; 108,000; 100,000) refers to different equipment purchases or costs related to the acquisition (such as delivery, installation, and setup costs that are necessary for the equipment to be ready for use), the total capitalized cost is simply the sum of these amounts.

To find out the total capitalized cost for Collin Corp.'s equipment, we add up the expenditures:

• 117,000
• 121,000
• 114,000
• 108,000
• 100,000

The total capitalized cost is 560,000.