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During the current year, Pitt Company incurred develop and produce a routine, ļow-risk computer s product. Completion of detailed program design Costa incurred for coding and testing to 1,3

During the current year, Pitt Company incurred develop and produce a routine, ļow-risk computer s product. Completion of detailed program design Costa incurred for coding and testing to 1,3

FINANCIAL ACCOUNTING
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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During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costa 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) 1,000,000 2,400,000 2,000,000 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. 5,700,00o c. 5,900,000
Transcribed Image Text:During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costa 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) 1,000,000 2,400,000 2,000,000 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. 5,700,00o c. 5,900,000
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