Internally Developed Computer SoftwareRequired: Based on the result of your audit, determine the following:____________1. Total Research and Development Costs to be expensed in 2011____________2. Amount to be capitalized as software development cost subject to amortization in 2012____________3. Amortization of software development cost in 2012____________4. Carrying value of software development cost on December 31, 2012____________5. Amount of Ending Inventory on December 31,2012 Problem 2. On January 1,2011, Microsoft Inc. decided to develop a new Operating System known as "Windows Infinite".In 2011, the software developer incurred the following costs in the process of designing, developing and producing thenew Operating System:Salaries and wages of programmers doing researchDesigning and planning the Operating SystemCode DevelopmentTesting the Operating SystemP500,000200,000300,000400,000On January 1,2012, the technological feasibility of the Operating System has been established. On the samedate, the company incurred P10,000,000 as the total cost of production of product master. The production of the softwarestarted on February 1,2012 and the product was marketed on the same date. The total costs of produced and preparedsoftware for sale is P5,000,000. The total sales of Windows Infinite during 2012 is P8,000,000. The normal gross profitrate of Microsoft Inc. is 40%. Microsoft estimated that the total sales revenues over the 4-year life of the product will beP40,000,000.Required: Based on the result of your audit, determine the following:1. Total Research and Development Costs to be expensed in 2011_2. Amount to be capitalized as software development cost subject to amortization in 20123. Amortization of software development cost in 20124. Carrying value of software development cost on December 31, 20125. Amount of Ending Inventory on December 31,2012

1) The cost incurred up to the technical feasibility established charged to research and development…

Required: Based on the result of your audit, determine the following: ____________1. Total Research and Development Costs to be expensed in 2011 ____________2. Amount to be capitalized as software development cost subject to amortization in 2012 ____________3. Amortization of software development cost in 2012 ____________4. Carrying value of software development cost on December 31, 2012 ____________5. Amount of Ending Inventory on December 31,2012

Required: Based on the result of your audit, determine the following: 1. Total Research and Development Costs to be expensed in 2011 2. Amount to be capitalized as software development cost subject to amortization in 2012 3. Amortization of software development cost in 2012 4. Carrying value of software development cost on December 31, 2012 5. Amount of Ending Inventory on December 31,2012

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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Subject: accounting
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Hh1.
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Modified Accelerated Cost Recovery System An example of a depreciation schedule under the Modified Accelerated Cost Recovery System of depreciation is shown. The Internal Revenue Service (IRS) classifies various assets according to useful life and sets depreciation rates for each year of the asset’s life. This asset has a five year life. The MACRS rates are shown in the schedule. This example is for an asset with a cost of $40,000 and a salvage value of $4,000. MODIFIED ACCELERATED COST RECOVERY SYSTEM Year Cost × Rate = DepreciationExpense AccumulatedDepreciation(End of Year) Book Value(End of Year) 1 $40,000 20.00% $8,000 $8,000 $32,000 2 40,000 32.00% 12,800 20,800 19,200 3 40,000 19.20% 7,680 28,480 11,520 4 40,000 11.52% 4,608 33,088 6,912 5 40,000 11.52% 4,608 37,696 2,304 6 40,000 5.76% 2,304 40,000 0 Prepare a depreciation schedule showing the depreciation…
Accounting Question
We will continue our discussion from Module 6 on depreciation. Please read the article: Bumblauskas, D., Igou, A, Bumblauskas, P., Vaske, B., & Hahn, K. (2021). The Fixed Asset Life Cycle ChallengeLinks to an external site.. SF Magazine.com. Select ONE talking point from the article that you found interesting. Support your position by stating why you believe your point is relevant to accounting for depreciation.
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Research and Development Costs (PAS 38) Required: Based on the result of your audit, determine the following for the year ended December 31,2011:____________1. Total Research Costs____________2. Total Development Costs____________3. Total Research and Development Costs____________4. Expenses which are not Research and Development Costs
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