Problem
Property, Plant and Equipment Problem #1
In 2009, Excetera, Inc. installed a new computerized production line at its North Dakota manufacturing facility. It incurred the following costs:
Cost of site preparation$700,000
Consulting fee (for advice on acquisition of the production line)25,000
Cost of the production line (per supplier's invoice)2,400,000
Sales tax (collected by the supplier)100,000
Initial delivery and handling costs600,000
Estimated dismantling costs to be incurred after seven years300,000
Computer training for employees prior to start of production150,000
Cost of testing whether the line is functioning properly20,000
Operating losses before commercial production begins400,000
Required: Determine the costs to be capitalized as property, plant and equipment under IFRS.