During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures...

During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $900,000, 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 $1,440,000. 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 $6,000,000.

Required

a. Prepare the journal entry to account for the development of this product in 2020.

Account Name	Dr.	Cr.
Answer	Answer	Answer
Answer	Answer	Answer
Answer	Answer	Answer

b. Prepare the journal entry to record the amortization of capitalized computer software development costs in 2021.

Account Name	Dr.	Cr.
Answer	Answer	Answer
Answer	Answer	Answer

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 $Answer
This is equal to $Answer originally capitalized less amortization in 2021 of $Answer
The amount charged to expense as amortization of software intangible asset in 2021 was $Answer

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?

Answer

Expert Solution

ekkarill92 answered 1 year ago

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