Parakeet Ltd has recently acquired a machine for an invoice price of \(\$ 70 \mathbf{0 0 0}\). Various other costs relating to the acquisition and installation of the machine include transportation, electrical wiring and preparing a platform for installation. These amounted to \$6 250. The machine has an estimated useful life of 10 years, with no residual value at the end of that period.

One of the accounting team has suggested that the incidental costs of \(\$ 6250\) be charged to expense immediately for the following reasons.

1. If the machine is sold, these costs cannot be recovered in the sales price.

2. The inclusion of the \(\$ 6250\) in the machinery account on the records will not necessarily result in a closer approximation of the market price of the asset over the years because of the possibility of changing demand and supply levels.

3. Charging the \(\$ 6 \mathbf{2 5 0}\) to expense immediately will lower the depreciation expense in future years.

Required 

Prepare a response to these arguments to be presented at the next meeting of the Parakeet Ltd accounting team.