Determining Classification of Software Costs During 2019, Accounting Software Inc. incurred $200,000 developing a working model of a new software program. During calendar 2020, an additional $50,000 of costs is incurred on the final coding and testing of the product masters. The product is available for sale as of the beginning of 2021 and is expected to have a four-year economic life. Costs incurred in 2021 pertaining to the production of the software and training materials totaled $210,000. Determine how the costs would initially be recorded: (1) research and development expense, (2) non-research and development expense, or (3) intangible asset. Classification Amount 1. Research and development expense 2. Non-research and development expense $ 3. Intangible asset 2$

Determining Classification of Software Costs During 2019, Accounting Software Inc. incurred $200,000 developing a working model of a new software program. During calendar 2020, an additional $50,000 of costs is incurred on the final coding and testing of the product masters. The product is available for sale as of the beginning of 2021 and is expected to have a four-year economic life. Costs incurred in 2021 pertaining to the production of the software and training materials totaled $210,000. Determine how the costs would initially be recorded: (1) research and development expense, (2) non-research and development expense, or (3) intangible asset. Classification Amount 1. Research and development expense 2. Non-research and development expense $ 3. Intangible asset 2$

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense? Multiple Choice Evenly over the period 2022-2026. Full amount in 2026. Evenly over the period 2021-2025. Full amount in 2021.
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During 2020, Grouper Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $370,000 $869,790 $1,080,000 Estimated costs to complete 630,000 231,210 –0– Billings to date 302,000 900,000 1,590,000 Collections to date 267,000 804,000 1,415,000 (a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount
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