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During 2018 Karen Company incurred costs to develop and produce a computer software product as follows: Completion of detailed program design or working model Php
During 2018 Karen Company incurred costs to develop and produce a computer software product as follows:
- Completion of detailed program design or working model Php 500,000
- Cost incurred for coding and testing to establish technological feasibility 10,000
- Other coding cost after establishment of technological feasibility 1,000,000
- Other testing cost after establishment of technological feasibility 750,000
- Cost of producing product masters 1,250,000
- Duplication of computer software and training materials from product master 1,500,000
- Packaging product 250,000
Required: Based on the above, answer the following:
- In the December 31, 2018 statement of financial position, what amount should be capitalized as software cost subject to depreciation?
- In the December 31, 2018 statement of financial position, what amount should be reported as inventory?
- Assuming the revenue method is used in the amortization and revenue for the year amounted to Php 10,000,000 and total expected revenue is Php 40,000,000, how much is the amortization for the year?
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