On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows: August 1 through December 31, 2021 $ 6,400,000 January 1 through January 31, 2022 1,210,000 February 1 through March 31, 2022 1,610,000 Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized. Required: Prepare the journal entries to record the development costs in 2021 and 2022
On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows: August 1 through December 31, 2021 $ 6,400,000 January 1 through January 31, 2022 1,210,000 February 1 through March 31, 2022 1,610,000 Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized. Required: Prepare the journal entries to record the development costs in 2021 and 2022
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....
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On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows:
| August 1 through December 31, 2021 | $ | 6,400,000 | |
| January 1 through January 31, 2022 | 1,210,000 | ||
| February 1 through March 31, 2022 | 1,610,000 | ||
Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized.
Required:
Prepare the
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