Question: Early in 2011, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2011 at a cost

Early in 2011, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2011 at a cost of $6 million. Of this amount, $4 million was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $10 million. During 2012, revenue of $4 million was recognized.

Required:
1. Prepare a journal entry to record the 2011 development costs.
2. Calculate the required amortization for 2012.
3. At what amount should the computer software costs be reported in the December 31, 2012, balance sheet?

Step by Step Solution

★★★★★

3.39 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Requirement 1 in millions Research and development expense 4 Software development c... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

254-B-A-I-A (3283).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Early in 2018, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2018 at a cost of $6 million. Of this amount, $4 million was spent...

In February 2018, Culverson Company began developing a new software to be sold to customers. The software allows people to enter health information and track daily eating and exercise habits to track...

Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $6 million. Of this amount, $4 million was spent...

Brief Exercise 11-12 (Algo) Amortization: Software development costs (LO11-4) Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in...

please complete all required parts Brief Exercise 11-12 (Algo) Amortization; Software development costs (L011-4) Early in 2021, the Excalibur Company began developing a new software package to be...

Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $66 million. Of this amount, $44 million was spent...

Check my work Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $42 million. Of this amount, $28...

Early in 2024, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2024 at a cost of $12 million. Of this amount, $8 million was spent...

Early in 2013, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2013 at a cost of $11 million. Of this amount, $9 million was spent...

Brief Exercise 11-12 (Algo) Amortization; Software development costs [LO11-4] Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in...

Cleanaway Inc. provides services for sustainable waste management solutions. The capital of Cleanaway Inc. are corporate bonds (60%) and equity (40%). The firm would like to consider undertaking the...

QUESTION 4 Use the information provided to answer the following questions: 4.1 Calculate the following ratios for 2021. Express answers to two decimal places. 4.1.1 Gross margin 4.1.2 Inventory...

Use the graph t o estimate the l i m i t . lim h 0 g ( 3 + h ) - g ( 3 ) h

Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.50 per mile driven. Joyce has determined that if she drives 3,300 miles in a month, her total operating cost is $875....

In late September 2015, Volkswagen found itself in the midst of a firestorm. The company, which captures 70 percent of the U.S. diesel-powered passenger-car market, was caught cheating on diesel...

The financial statements of Apple Inc. for 2013 are presented in Appendix A. Instructions for accessing and using the companys complete annual report, including the notes to the financial statements,...

At the end of January 2015, the records of NewRidge Company showed the following for a particular item that sold at $16 per unit: Required: 1. Assuming the use of a periodic inventory system, prepare...

Dayton Industries is contemplating some operational changes to reduce its overall costs of quality. The company believes that if it upgrades one component of its product at an additional cost of...

4. Briefly describe two indenture provisions that can affect the maturity of a bond.

Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $5,000...

On April 1, 2018, John Vaughn purchased appliances from the Acme Appliance Company for $1,200. In order to increase sales, Acme allows customers to pay in installments and will defer any payments for...

On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of $300 million. The bonds mature on September 30, 2038 (20 years). The market rate of interest for...

Is net income for March expected to increase with the proposed strategy changes? Complete this question by entering your answers in the tabs below. Prepare budgeted income statements for each of the...

A General Power bond with a face value of $1,000 carries a coupon rate of 8.9%, has 9 years until maturity, and sells at a yield to maturity of 7.9%. (Assume annual interest payments.) a. What...

You own a stock portfolio invested 27 percent in Stock Q, 17 percent in Stock R, 43 percent in Stock S, and 13 percent in Stock T. The betas for these four stocks are 0.96, 1.02, 1.42, and 1.87,...