During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Costs of producing product masters for training materials Duplication of computer software and training materials from product masters (1,000 units) Packaging product (500 units) 1,300,000 1,000,000 2,400,000 1,500,000 2,500,000 1. In the year-end statement of financial position, what amount should be reported in inventory? a. 2,500,000 b. 3,400,000 c. 4,000,000 d. 4,900,000 2. What total amount .of the costs incurred should be expensed immediately? a. 8,200,000 b. 2,300,000 c. 6,700,000 d. 4,400,000 3. In the year-end statement of financial position, what amount should be capitalized as software cost? a. 5,400,000 b. 5,700,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During the current year, Pitt Company incurred costs to
develop and produce a routine, low-risk computer software
product.
Completion of detailed program design
Costs incurred for coding and testing to
establish technological feasibility
Other coding costs after establishment
of technological feasibility
Other testing costs after establishment
of technological feasibility
Costs of producing product masters for
training materials
Duplication of computer software and
training materials from product
masters (1,000 units)
Packaging product (500 units)
1,300,000
1,000,000
2,400,000
1,500,000
2,500,000
1. In the year-end statement of financial position, what
amount should be reported in inventory?
a. 2,500,000
b. 3,400,000
c. 4,000,000
d. 4,900,000
2. What total amount .of the costs incurred should be
expensed immediately?
a. 8,200,000
b. 2,300,000
c. 6,700,000
d. 4,400,000
3. In the year-end statement of financial position, what
amount should be capitalized as software cost?
a. 5,400,000
b. 5,700,000
Transcribed Image Text:During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Costs of producing product masters for training materials Duplication of computer software and training materials from product masters (1,000 units) Packaging product (500 units) 1,300,000 1,000,000 2,400,000 1,500,000 2,500,000 1. In the year-end statement of financial position, what amount should be reported in inventory? a. 2,500,000 b. 3,400,000 c. 4,000,000 d. 4,900,000 2. What total amount .of the costs incurred should be expensed immediately? a. 8,200,000 b. 2,300,000 c. 6,700,000 d. 4,400,000 3. In the year-end statement of financial position, what amount should be capitalized as software cost? a. 5,400,000 b. 5,700,000
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