n July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000. How much is the amortization expense for the computer software for the six months ended December 31,2020?
n July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000. How much is the amortization expense for the computer software for the six months ended December 31,2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2020, Rudy Project (a calendar-year corporation) had capitalized cost of P1,200,000 for a new computer software product with an economic life of 3 years. Sales from July 1 to December 31, 2020 amounted to P1,000,000. It is expected that sales of software during its three-year economic life would total P4,000,000. The pattern of sales is established as P2,000,000 in the first year, P1,500,000 in the second year and P500,000 in the third year. On December 31, 2020, the software had a net realizable value of P950,000.
How much is the amortization expense for the computer software for the six months ended December 31,2020?
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