project in 2021. The project re ailable for release to custome ne 30, 2021 were $3,200,000 ere $1,400,000. 2022 revenue npany anticipates additional re ted at four years. 2022 amorti
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Q: Record the amount of amortization of capitalized computer development software costs for 2020.
A:
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- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?Micropolis Technology began a new development project in 2020. The project reached technological feasibility on September 1, 2021, and was available for release to customers at the beginning of 2022. Development costs incurred prior to September 1, 2021, were $4,560,000, and costs incurred from June 30 to the product release date were $1,920,000. The 2022 revenues from the sale of the new software were $3,950,000, and the company anticipates additional revenues of $11,850,000. The economic life of the software is estimated at three years. Amortization of the software development costs for the year 2022 would be:A company began a new software development project in 2023. The project reached technological feasibility on June 30, 2024, and was available for release to customers at the beginning of 2025. Development costs incurred prior to June 30, 2024, were $3,260,000 and costs incurred from June 30, 2024, to the product release date were $1,460,000. The economic life of the software is estimated at four years. For what amount will software be capitalized in 2024?
- Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $6 million. Of this amount, $4 million was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $10 million. During 2022, revenue of $3 million was recognized.Required:Prepare a journal entry to record the 2021 development costs.[2] In May 2021, Oliver Queen Company began work on a project that has a contact price of P5,000,000. Any costs incurred are expected to be recoverable. Progress billing, collections are of equal amount with costs incurred. 2021 2022 Cost incurred to date 1,125,000 3,825,000 Estimated cost to complete 3,375,000 1,275,000 Total estimated cost 4,500,000 5,100,000 In its income statement for the year 2022, the company would recognize a gross profit of (1) under percentage of completion method; (2) under cost recovery method: 225,000; (75,000) (200,000); zero (225,000); (100,000) (225,000); zeroDuring 2019, Latte Inc., spent P5,000,000 developing its new "Hyperion" software package. Of this amount, P2,200,000 was spent before technological feasibility was established for the product, which is to be marketed to third parties. The package was completed at December 31, 2019. Latte expects a useful life of 8 years for this product with total revenues of P16,000,000. During the first year (2020), Latte realizes revenues of P3,200,000 a. What journal entries should have been prepared by the accountant in 2019 for the foregoing facts? b. Prepare the entry to record amortization at December 31, 2020
- In 2020, Lalli Corporation incurred R&D costs as follows:Materials and equipment P100,000Personnel 100,000Indirect costs 50,000P250,000These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024.Required What is the amount of R&D costs expense in 2020? Show the solution step by stepOn 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.A price company from time to time embarks on a research program when a special project seems to offer possibilities in 2019 the company expands $325,000 on a research project, but by the end of 2019, it is possible to determine whether any benefits will be driven from it. What account should be charged from 325,000 and how should be shown in the financial statement? Additional engineering and consulting costs incurred in 2021 are required to advance the design of the project in the manufacturing stage. Total $60,000. These costs enhance the design of the product considerably. Discuss the proper account treatment for this cost.
- Sandstorm Corporation decides to develop a new line of paints. The project begins in 2023. Sandstorm incurs the following expenses in 2023 in connection with the project: Salaries $170,000 Materials 51,000 Depreciation on equipment 25,500 The benefits from the project were realized starting in July 2024. If an amount is zero, enter "0". What are Sand-storm’s related deductions in 2023 and 2024 in connection with the project?Suneilert Construction Company had a contract starting April 2021, to construct a P15,000,000 building that is expected to be completed in September 2022, at an estimated cost of P13,750,000. At the end of 2021, the costs to date were P6,325,000 and the estimated total costs to complete had not changed. The progress billings during 2021 were P3,000,000 and the cash collected during 2021 was P2,000,000. Suneilert uses the percentage-of-completion method.For the year ended December 31, 2021, Suneilert would recognize gross profit on the building of?During 2024, a software company incurred development costs of $2,000,000 related to a new software project. Of this amount, $400,000 was incurred after technological feasibility was achieved. The project was completed in the middle of the year and the product was available for release to customers on July 1. Revenues from the sale of the new software in 2024 were $500,000 and the company anticipated future additional revenues of $4,500,000. The economic life of the software is estimated at four years. What is amortization in 2024?
