El Tapitio purchased equipment from Old World Deli. Old World Deli was closing its business and sold its restaurant equipment for $80,000. In addition to the purchase price, El Tapitio paid shipping costs of $2,000. Employees of El Tapitio installed the ovens; labor costs were $10,000. An outside contractor performed some of the electrical work for $2,200. El Tapitio incurred costs of $800 in testing the equipment.
1. Prepare a schedule showing the amount at which the equipment should be recorded in El Tapitio’s equipment account.
2. Indicate where any amounts not included in the equipment account should be recorded.