Question

Innovative Incorporated has recently designed and developed its own payroll system for use in its own business. If there is a market the company may also decide to sell it to outside companies. Work on this project was completed over an 18- month period. The following costs were incurred in development of the software:
Conceptual design work................. $ 3,200
Evaluation and decision on alternative options.......... 4,100
Evaluation and consideration software requirements for options.. 9,500
Final selection of option................. 2,300
Software design work ................. 50,000
Software coding ..................... 28,000
Testing of software .................... 12,000
Data conversion costs information from old system ...... 8,300
Staff training on new software............... 2,100
Allocation variable overhead costs ............ 5,500
Allocation general and administrative costs......... 8,800
Ongoing software maintenance.............. 4,500

Required:
1. Indicate how much would be accounted for as an intangible asset for software. Explain why a cost is included or not included.
2. Are software costs always classified as an intangible asset? Explain why or why not.



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  • CreatedFebruary 17, 2015
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