Beaverton Lumber purchased milling equipment for $35,000. In addition to the purchase price, Beaverton made the following expenditures

Beaverton Lumber purchased milling equipment for $35,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $1,500; installation, $3,000; testing, $2,000; personal property tax on the equipment for the first year, $500.

What is the initial cost of the equipment?

 

Note: Personal property taxes on the equipment for the period after acquisition are not part of acquisition cost. They are expensed in the period incurred.

Thanks