Research Case:

Dog Lovers of America (DLA) is a private company with an October 31^st fiscal year end. DLA is an online magazine for dog owners. The company was founded in November 2021 after the founders saw how many people adopted dogs during the pandemic. The magazine addresses training techniques, nutrition, pet supplies, etc. The online magazine sells 12-month magazine subscriptions and has a daily blog.

In September 2022, DLAs management realized that a customer relationship management (CRM) software system was necessary to help the business increase market share and meet customers needs. The company believed that they would be best served by hiring software design experts to design the internal use CRM system instead of outsourcing the project to an outside organization. DLA believed it would be beneficial for the company to have permanent software designers on staff to create (and later maintain) the CRM system.

The CRM system was completed in December 2022. DLA correctly recognized an asset (CRM System) from the application development stage and data conversion stage of internally developing the CRM system. DLA management was very pleased with the success they had achieved in implementing the new CRM software

The carrying value of the CRM system as of October 31, 2023, was $250,000.

In May 2023 DLA management began to explore additional sources of revenue for the company. DLA management decided to sell licenses to other online magazines/blogs to use the CRM software which DLA had developed. The sales price for an annual license to use DLAs CRM system was $12,000.

In October 2023 DLA sold 10 licenses for CRM system to other online publications. DLA received the annual payment for each of these sales in October 2023. DLA recognized the sales of the 10 licenses as follows:

October 2023 Cash 120,000

CRM License Revenue 120,000

1. : DLA should recognize the sale of the CRM licenses as.. (fill in the blank)

___________________________

1. If necessary, prepare a journal entry so the financial statements are correct as of October 31, 2023. If a journal entry is not necessary; indicate N/A.

Date	Account Name	Debit	Credit