Lavoie Corp acquired new equipment at a cost of $100000 plus 7% provincial sales tax and 5% GST (GST is a recoverable tax). The company paid $1700 to transport the equipment to its plant. The site where the equipment was to be place was not yet ready and Lavoie Corp spent another $500 for one month's storage costs. When installed, $300 in labour and $200 in materials were used to adjust and calibrate the machine to the company's exact specifications. The units predicted in the trial runs wer subsequently sold to employees for $400. During the first two months of production, the equipment was used at only 50% of its capacity. Labour costs of $3000 and material costs of $2000 were incurred in this production, while the units sold generated $5500 in sales. Lavoie paid an engineering consulting firm $11000 for its services in recommending the specific equipment to purchase and for the help during the calibration phase. Borrowing costs of $800 were incurred because of the one-month delay in installation.
Instructions:
Determine the capitalized cost of the equipment and explain why the remainder of the cost have not been capitalized.