On September 30, year 1, Foxgen Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, year 2, and the program was available for release on April 30, year 2. Development costs were incurred as follows: September 30 through December 31, year 1 January 1 through February 28, year 2 March 1 through April 30, year 2 $3,500,000 700,000 500,000 Foxgen expects a useful life of four years for the software and total revenues of $4,500,000 during that time. During year 2, revenue of $1,500,000 was recognized. Required: 1. Prepare the journal entries to record the development costs in year 1 and year 2. 2. Calculate the required amortization for year 2.

On September 30, year 1, Foxgen Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, year 2, and the program was available for release on April 30, year 2. Development costs were incurred as follows: September 30 through December 31, year 1 January 1 through February 28, year 2 March 1 through April 30, year 2 $3,500,000 700,000 500,000 Foxgen expects a useful life of four years for the software and total revenues of $4,500,000 during that time. During year 2, revenue of $1,500,000 was recognized. Required: 1. Prepare the journal entries to record the development costs in year 1 and year 2. 2. Calculate the required amortization for year 2.

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter14: Auditing It Controls Part I: Sarbanes-oxley And It Governance

Section: Chapter Questions

Problem 12P

See similar textbooks

Similar questions

On September 30, 2024, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2025, and the program was available for release on April 30, 2025. Development costs were incurred as follows: September 30 through December 31, 2024 January 1 through February 28, 2025 March 1 through April 30, 2025 $ 2,220,000 820,000 420,000 Athens expects a useful life of four years for the software and total revenues of $6,000,000 during that time. During 2025, revenue of $1,200,000 was recognized. Required: Prepare a journal entry in each year to record development costs for 2024 and 2025.
Consider each of the transaction below independently. All expenditures were made in cash During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $800,000, of which 30% occurred after the technological feasibility of the product had been established. Prepare all necessary journal entries to record each the transaction. Use this format: Date Account Titles DR CR
XYZ Company made expenditures for the following: Costs in activities aimed at obtaining new knowledge P 10,000 Cost of developing and producing a prototype model 3,000 Cost of testing the prototype model for safety and environmental friendliness 30,000 Cost of revising designs for flaws in the prototype model 10,000 Salaries of employees, consultants and technicians involved in R and D 20,000 Marketing research to study consumer tastes 5,000 Advertising to establish recognition of the newly developed product 30,000 Cost of conference for the introduction of the newly developed product including fee of a model hired as endorser How much is recognized as research and development expense? _____________
PLease present in good accounting form.
18. ABC Company had the following expenditures related to a software: Costs to develop the software for internal use in ABC's operations (after technological feasibility) P100,000 Cost of market research activities, P75,000 How much costs should be expensed? 175,000 100,000 75,000 0
Satellite Systems modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures:Basic research to develop the technology $ 3,900,000Engineering design work 1,180,000Development of a prototype device 590,000Testing and modification of the prototype 390,000Legal fees for patent application 79,000Legal fees for successful defense of the new patent 39,000Total $ 6,178,000During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the patent. Management contends that the device represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized.Required:1. Which of the above costs should Satellite Systems capitalize to the Patent account in the balance sheet?2. Which of the above costs should Satellite Systems report as research and development expense in the income statement?3. What are the basic criteria…
Example 2 Kaokodi Ltd received a grant of GHC60 million to compensate it for costs it incurred in planting trees over a period of five years. Kaokodi Ltd will incur such costs in this manner: Year Costs GHC'000 1 2,000 2 4,000 6,000 4 8,000 10,000 Total costs thus incurred will aggregate to GHC30 million, whereas the grant received is GHC60 million. Reguired: Based on the provisions of IAS 20, how would Kaokodi Ltd treat the "grant" in its books? Example 3 Nyansapo Ltd received a grant of GHC150 million to install and run a solar energy system in an economically backward area. Nyansapo Ltd has estimated that such a system would cost GHC250 million to construct. The secondary condition attached to the grant is that the entity should hire labour in the local market (i.e., from the economically backward area where the windmill is located) instead of emploving workers from other parts of the country. It should maintain a ratio of 1:1 local worker to workers from outside in its labor force…
Please help me. Thankyou.
5. On January 2, 20X1, St. Paul Vision Center purchased equipment at a cost of $63,000. Before placing the equipment in service, St. Paul spent $2,200 for special chips, $800 for a platform, and $4,000 to customize the equipment. St. Paul management estimates that the equipment will remain in service for 6 years and have a residual value of $16,000. The equipment can be expected to process 18,000 examinations in each of the first 4 years and 14,000 tests in each of the next 2 years. In trying to decide which depreciation method to use, Lana Rich, the general manager, requests a depreciation schedule for each method (straight-line, units-of-production, and double declining balance). Required A. Prepare a depreciation schedule for each of the depreciation methods, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. B. St. Paul reports to creditors in the financial statements using the depreciation method that maximizes reported income in the early…
Matt Lab Berhad's main activities are research and development. Currently, it develops a chemical formula for cleaning materials. The prototype is near completion. The cost of the project is as follows: Cost of Materials: RM250,000 Consultant Fees: RM75,000 Fees to register trade design: RM15,000 Selling and administrative cost allocated: RM78,000 Training cost to operate assets: RM36,000 Depreciation of Equipment: RM20,000 Required: Determine the cost of the development project that should be capitalized. Select one: O a. RM340,000 Ob. RM360,000 OC RM474.000 d. RM396.000
please help me in getting correct answer and dont give images in answer thanku
Journalize the ff transactions