Question: Garfunkel, Inc. has incurred $6 million in developing a computer software product for sale to third parties. Of the $6 million costs incurred, $4.5 million

Garfunkel, Inc. has incurred $6 million in developing a computer software product for sale to third parties. Of the $6 million costs incurred, $4.5 million is capitalized. The product produced from this development work has generated $2 million of revenue in 2012 and is anticipated to generate another $8 million in future years. The estimated useful life of the project is 4 years. How much of the capitalized costs should be amortized in 2012?

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