Answered: Required: 1. Prepare a journal entry to…

Required: 1. Prepare a journal entry to record the development costs in each year of 2024 and 2025. 2. Calculate the required amortization for 2025.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Brief Exercise 11-13 (Algo) Amortization; Software development costs [LO11-4]
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
Athens expects a useful life of four years for the software and total revenues of $7,600,000 during that time. During
2025, revenue of $1,520,000 was recognized.
Required:
1. Prepare a journal entry to record the development costs in each year of 2024 and 2025.
2. Calculate the required amortization for 2025.
Complete this question by entering your answers in the tabs below.
Required Required
1
2
Prepare a journal entry to record the development costs in each year of 2024 and 2025.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.
View transaction list
Journal entry worksheet
1
2
3,500,000
1,450,000
573,000
Prepare a journal entry to record the development costs
in 2024. All costs were paid with cash.
Note: Enter debits before credits.
General Journal
Event
1
Record entry
Clear entry
Debit Credit
View general journal
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