n July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000. How much is the amortization expense for the computer software for the six months ended December 31,2020?
n July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000. How much is the amortization expense for the computer software for the six months ended December 31,2020?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 22P
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On July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000.
How much is the amortization expense for the computer software for the six months ended December 31,2020?
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