Early in year 1, the Carlbury Company began developing a new software package to be marketed. The project was completed in December, year 1, at a cost of $15 million. Of this amount, $10 million was spent before technological feasibility was established. Carlbury expects a useful life of five years for the new product with total revenues of $25 million. During year 2, revenue of $10 million was recognized. Required: Prepare a journal entry to record the year 1 development costs. (This includes a table/chart.
Early in year 1, the Carlbury Company began developing a new software package to be marketed. The project was completed in December, year 1, at a cost of $15 million. Of this amount, $10 million was spent before technological feasibility was established. Carlbury expects a useful life of five years for the new product with total revenues of $25 million. During year 2, revenue of $10 million was recognized. Required: Prepare a journal entry to record the year 1 development costs. (This includes a table/chart.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Early in year 1, the Carlbury Company began developing a new software package to be marketed. The
project was completed in December, year 1, at a cost of $15 million. Of this amount, $10 million was spent
before technological feasibility was established. Carlbury expects a useful life of five years for the new
product with total revenues of $25 million. During year 2, revenue of $10 million was recognized.
Required: Prepare a journal entry to record the year 1 development costs. (This includes a table/chart.
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