Sandhill Communications contracted to set up a call center for the City of Phoenix. Under the terms of the contract, Sandhill Communications will design and set-up a call center with the following costs: Design of call center $18000 Computers, servers, telephone equipment $510000 Software $150000 Installation and testing of equipment $26000 Selling commission $46000 Annual service contract $80000 In addition, Sandhill Communications will maintain and service the equipment and software to ensure smooth operations of the call center for an annual fee of $160000. Ownership of equipment installed remains with the City of Phoenix. The contract costs that should be capitalized is $678000. $830000. $660000. $750000.

Sandhill Communications contracted to set up a call center for the City of Phoenix. Under the terms of the contract, Sandhill Communications will design and set-up a call center with the following costs: Design of call center $18000 Computers, servers, telephone equipment $510000 Software $150000 Installation and testing of equipment $26000 Selling commission $46000 Annual service contract $80000 In addition, Sandhill Communications will maintain and service the equipment and software to ensure smooth operations of the call center for an annual fee of $160000. Ownership of equipment installed remains with the City of Phoenix. The contract costs that should be capitalized is $678000. $830000. $660000. $750000.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

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bartleby, a Learneo, Inc. business

Design of call center	$18000
Computers, servers, telephone equipment	$510000
Software	$150000
Installation and testing of equipment	$26000
Selling commission	$46000
Annual service contract	$80000