On August 1, 2024, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2025, and the program was available for release on March 31, 2025. Development costs were incurred as follows: August 1 through December 31, 2024 January 1 through January 31, 2025 February 1 through March 31, 2025 $6,300,000 1,200,000 1,600,000 Reliable expects a service life of five years for the software and total revenues of $8,000,000 during that time. During 2025, revenues of $2,000,000 was recognized. Required: 1. Prepare the journal entries to record the development costs in 2024 and 2025. 2. Calculate the required amortization for 2025.

On August 1, 2024, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2025, and the program was available for release on March 31, 2025. Development costs were incurred as follows: August 1 through December 31, 2024 January 1 through January 31, 2025 February 1 through March 31, 2025 $6,300,000 1,200,000 1,600,000 Reliable expects a service life of five years for the software and total revenues of $8,000,000 during that time. During 2025, revenues of $2,000,000 was recognized. Required: 1. Prepare the journal entries to record the development costs in 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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