Rocco Company has created new apps for mobile phones. Its costs during research and development were $375,000.

Question:

Rocco Company has created new apps for mobile phones. Its costs during research and development were $375,000. Its costs after the working program was developed were $264,000. Although the company’s copyright may be amortized over 40 years, management believes that the product will be viable for only six years. How should the costs be accounted for? At what value will the apps appear on the balance sheet after one year?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...