On January 1, 2021, Gringo Company had capitalized cost of P5,000,000 for a new computer software product with an economic life of 5 years. Sales for 2021 amounted to P3,000,000. The total sales of software over its economic life are expected to be P10,000,000. The pattern of future sales cannot be measured reliably. On December 31, 2021, the software had a net realizable value of P4,500,000. What is the carrying amount of the computer software on December 31, 2021?
On January 1, 2021, Gringo Company had capitalized cost of P5,000,000 for a new computer software product with an economic life of 5 years. Sales for 2021 amounted to P3,000,000. The total sales of software over its economic life are expected to be P10,000,000. The pattern of future sales cannot be measured reliably. On December 31, 2021, the software had a net realizable value of P4,500,000. What is the carrying amount of the computer software on December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. Gringo Company
Transcribed Image Text:On January 1, 2021, Gringo Company had capitalized cost of P5,000,000 for a new computer software
product with an economic life of 5 years. Sales for 2021 amounted to P3,000,000. The total sales of
software over its economic life are expected to be P10,000,000. The pattern of future sales cannot be
measured reliably. On December 31, 2021, the software had a net realizable value of P4,500,000. What
is the carrying amount of the computer software on December 31, 2021?
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