On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows: August 1 through December 31, 2021 $ 6,400,000 January 1 through January 31, 2022 1,210,000 February 1 through March 31, 2022 1,610,000 Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized. Required: Prepare the journal entries to record the development costs in 2021 and 2022
On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows: August 1 through December 31, 2021 $ 6,400,000 January 1 through January 31, 2022 1,210,000 February 1 through March 31, 2022 1,610,000 Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized. Required: Prepare the journal entries to record the development costs in 2021 and 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On August 1, 2021, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2022, and the program was available for release on March 31, 2022. Development costs were incurred as follows:
| August 1 through December 31, 2021 | $ | 6,400,000 | |
| January 1 through January 31, 2022 | 1,210,000 | ||
| February 1 through March 31, 2022 | 1,610,000 | ||
Reliable expects a useful life of five years for the software and total revenues of $8,100,000 during that time. During 2022, revenue of $2,106,000 was recognized.
Required:
Prepare the
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