The Elegant Software Company recently completed the development and testing of a new software program for...

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The Elegant Software Company recently completed the development and testing of a new software program for sale to customers that provides the ability to transfer data from among a variety of operating systems. The company believes this product will generate significant revenues in future years and capitalized all of the costs of designing, developing, coding, and testing the software. These costs will be amortized over the expected useful life of the software. Required: 1. Was Elegant correct in its treatment of the software development costs? Why? 2. Suppose the software was developed for internal use instead of external sales to customers. Was Elegant correct in its treatment of the software development costs? Why? 3. What if the same amount of cost was incurred to purchase the internal-use software in its completed form from a vendor? The Elegant Software Company recently completed the development and testing of a new software program for sale to customers that provides the ability to transfer data from among a variety of operating systems. The company believes this product will generate significant revenues in future years and capitalized all of the costs of designing, developing, coding, and testing the software. These costs will be amortized over the expected useful life of the software. Required: 1. Was Elegant correct in its treatment of the software development costs? Why? 2. Suppose the software was developed for internal use instead of external sales to customers. Was Elegant correct in its treatment of the software development costs? Why? 3. What if the same amount of cost was incurred to purchase the internal-use software in its completed form from a vendor?

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Was Elegant correct in its treatment of the software development costs Why Elegant Software Company was correct in capitalizing the costs of designing ... View the full answer