Question
On September 30, 2024, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February
On September 30, 2024, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2025, and the program was available for release on April 30, 2025. Development costs were incurred as follows:
| September 30 through December 31, 2024 | $ 2,900,000 |
|---|---|
| January 1 through February 28, 2025 | 1,150,000 |
| March 1 through April 30, 2025 | 447,000 |
Athens expects a useful life of four years for the software and total revenues of $6,400,000 during that time. During 2025, revenue of $1,280,000 was recognized.
Required:
- Prepare a journal entry to record the development costs in each year of 2024 and 2025.
- Calculate the required amortization for 2025.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing
Authors: Alan Millichamp, John Taylor
11th Edition
1473749301, 978-1473749306
