Exercise 5-18 Revenue recognition; software [LO5-6]

Easywrite Software Company shipped software to a customer on July 1, 2013. The arrangement with the customer also requires the company to provide technical support over the next 12 months and to ship an expected software upgrade on January 1, 2014. Assuming that Easywrite sold each of the components separately for the amounts listed, the total contract price is $264,000, and Easywrite estimates that the individual fair values of the components of the arrangement if sold separately would be:

Software	$	200,000
Technical support		20,000
Upgrade		20,000

Required:
1.	Determine the timing and amount of revenue recognition for the $264,000. (Do not round intermediate calculations.)

	Timing	Amount
Software

$
Technical support

	$
Upgrade

	$

2.	Assume that the $264,000 contract price was paid on July 1, 2013. Prepare a journal entry to record the cash receipt. Do not worry about the cost of the items sold. (Do not round intermediate calculations.)

Date	General Journal	Debit	Credit
July 1, 2013	To record sale of software