Accounting for Software Development Costs During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $5,400,000, of which 40% occurred after the technological feasibility of the product had been established. The product was completed and offered for sale on January 1, 2021. During 2021, revenues from sales of the product totaled $8,640,000. The package is expected to be successfully marketable for five years, and the total revenues over the life of the product are estimated to be $36,000,000. Required a. Prepare the journal entry to account for the development of this product in 2020. Account Name Dr. Cr. Software Intangible Asset 2,160,000 Software Development Expense 3,240,000 Cash, Payables, Accruals 5,400,000 b. Prepare the journal entry to record the amortization of capitalized computer software development costs in 2021. Account Name Cr. Software Amortization Expense 432,000 x Software Intangible Asset 432,000 x c. What disclosures are required in the December 31, 2021, financial statements regarding computer software costs? Enter the missing items from the following note disclosure. At December 31, 2021, the unamortized software intangible asset totals $ 5,400,000 This is equal to $ 2,160,000 originally capitalized less amortization in 2021 of $ 432,000 The amount charged to expense as amortization of software intangible asset in 2021 was $ 432,000 x The estimated net realizable value of computer software is greater than the remaining unamortized software intangible asset. d. Suppose this product were developed for internal use. How would your answers to (a), (b), and (c) change? Procedures are generally the same for internally used software as for software produced for sa Dr. X Check