Abby Inc. is an established computer software company. In 2009, the firm incurred the following costs in the process of designing, developing and producing a new software program using a certain technology to access the Internet: Designing and planning P1,800,000 Code development 2,700,000 Testing 900,000 Production of product master 4,500,000 In 2010, Abby incurred P1,800,000 in costs to produce the software program for sale in 2010. The costs of designing and planning, code development and testing were all incurred before the technological feasibility of the product was established. Abby began marketing the software program in 2010 and earned revenues of P4,320,000 in 2010. Abby estimates that the total revenues over the 4-year life of the product will be P21,600,000. At the end of 2010, Abby was offered P7,200,000 for the rights to distribute the software. Determine: 1. Depletion for 2010 2. Total Inventoriable depreciation for 2010 3. Inventory as of December 31, 2010 4. Cost of Sales for the year ended, December 31, 2010 5. Maximum amount of dividends that may be declared at the end of the company's first year of operations
Abby Inc. is an established computer software company. In 2009, the firm incurred the following costs in the process of designing, developing and producing a new software program using a certain technology to access the Internet:
Designing and planning P1,800,000
Code development 2,700,000
Testing 900,000
Production of product master 4,500,000
In 2010, Abby incurred P1,800,000 in costs to produce the software program for sale in 2010. The costs of designing and planning, code development and testing were all incurred before the technological feasibility of the product was established. Abby began marketing the software program in 2010 and earned revenues of P4,320,000 in 2010. Abby estimates that the total revenues over the 4-year life of the product will be P21,600,000. At the end of 2010, Abby was offered P7,200,000 for the rights to distribute the software.
Determine:
1. Depletion for 2010
2. Total Inventoriable depreciation for 2010
3. Inventory as of December 31, 2010
4. Cost of Sales for the year ended, December 31, 2010
5. Maximum amount of dividends that may be declared at the end of the company's first year of operations
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