During 2017, Cullumber Enterprises Ltd., a private entity, incurred $4.9 million in costs to develop a...

 

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During 2017, Cullumber Enterprises Ltd., a private entity, incurred $4.9 million in costs to develop a new software product called Dover. Of this amount, $1.5 million was spent before establishing that the product was technologically and financially feasible. Dover was completed by December 31, 2017, and will be marketed to third parties. Cullumber expects a useful life of 8 years for this product, with total revenues of $13 million. During 2018, Cullumber realized revenues of $2.6 million from sales of Dover. Assuming Cullumber reports under ASPE, prepare the journal entries that are required in 2017 to record the above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Research and Development Expense Cash (To record cost incurred on research and development) Debit Credit 1,500,000 1,500,000 Software Cash 3,400,000 3,400,000 (To record costs associated with intangible assets) Prepare the entry to record amortization at December 31, 2018 using the straight line method. (Round answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Dec. 31, 2018 Amortization Expense Accumulated Amortization - Software Debit Credit 425,000 425,000 At what amount should the software costs be reported in the December 31, 2018 balance sheet? (Round answer to 0 decimal places, e.g. 5,275.) The Software costs be reported in the December 31, 2018 balance sheet 2,975,000 During 2017, Cullumber Enterprises Ltd., a private entity, incurred $4.9 million in costs to develop a new software product called Dover. Of this amount, $1.5 million was spent before establishing that the product was technologically and financially feasible. Dover was completed by December 31, 2017, and will be marketed to third parties. Cullumber expects a useful life of 8 years for this product, with total revenues of $13 million. During 2018, Cullumber realized revenues of $2.6 million from sales of Dover. Assuming Cullumber reports under ASPE, prepare the journal entries that are required in 2017 to record the above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Research and Development Expense Cash (To record cost incurred on research and development) Debit Credit 1,500,000 1,500,000 Software Cash 3,400,000 3,400,000 (To record costs associated with intangible assets) Prepare the entry to record amortization at December 31, 2018 using the straight line method. (Round answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Dec. 31, 2018 Amortization Expense Accumulated Amortization - Software Debit Credit 425,000 425,000 At what amount should the software costs be reported in the December 31, 2018 balance sheet? (Round answer to 0 decimal places, e.g. 5,275.) The Software costs be reported in the December 31, 2018 balance sheet 2,975,000