During the current year, Pitt Company incurred costs todevelop and produce a routine, low-risk computer softwareproduct.1,300,000Completion of detailed program designCosta incurred for coding and testing toestablish technological feasibilityOther coding costs after establishmentof technological feasibilityOther testing costs after establishmentof technological feasibilityCosts of producing product masters fortraining materialsDuplication of computer software andtraining materials from productmasters (1,000 units)Packaging product (500 units)1,000,0002,400,0002,000,0001,500,0002,500,0001. In the year-end statement of financial position, whatamount should be reported in inventory?a. 2,500,000b. 3,400,000c. 4,000,000d. 4,900,0002. What total amount of the costs incurred should beexpensed immediately?a. 8,200,000b. 2,300,000c. 6,700,000d. 4,400,0003. In the year-end statement of financial position, whatamount should be capitalized as software cost?a. 5,400,000b. 5,700,00oc. 5,900,000

Inventory is the accounting of items, component parts, and raw materials used in production or sold…

Answered: During the current year, Pitt Company…

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

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

100%

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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