During 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
During 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 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
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