ACPC, a computer hardware manufacturer, purchases a machine that applies integrated circuit chips to circuit boards using a process called Chips Ahoy Technology (CAT). The costs of acquiring the CAT machine are as follows:
Purchase price………………………………………………….. $275,000
Freight cost………………………………………………………. 2,550
Repairs made to the room as a result of
improper wiring of an outlet needed for the
machine………………………………………………………… 3,800
Engineer’s fee to set up and test the CAT and
adjust it to required specifications………………. 6,100
Cost of circuit chips and boards used to test the
new CAT machine to ensure it is working
properly………………………………………………..…….. 385
Cost of 2-year service contract. The manufacturer
agrees to make any repairs necessary to the
CAT machine………………………………………………… 4,000
The separate costs should be recorded in the accounting records as either the asset – CAT machine or an expense account. What total amount would the asset - CAT machine be listed as in the accounting records?