N Co. incurred the following costs in self-generating computer software: Completion of detailed program design Cost incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Cost of producing product masters Reproduction and duplication costs from product masters Packaging costs for the reproduced software How much is the cost of computer software recognized as intangible asset? P2,000,000 1,600,000 4,000,000 3,200,000 2,400,000 4,800,000 1,200,000

N Co. incurred the following costs in self-generating computer software: Completion of detailed program design Cost incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Cost of producing product masters Reproduction and duplication costs from product masters Packaging costs for the reproduced software How much is the cost of computer software recognized as intangible asset? P2,000,000 1,600,000 4,000,000 3,200,000 2,400,000 4,800,000 1,200,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 5E

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Outspoken Company made the following expenditures relating to Product Y. Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent Special equipment to be used solely for development of Product Y. The equipment has no other use and has an estimated useful life of four years. Labor and material costs incurred in producing a prototype Cost of testing the prototype - 100,000 600,000 2,000,000 800,000 What total amount should be expensed when incurred? a. 2,800,000 b. 2,950,000 c. 3,400,000 d. 3,500,000
Required information [The following information applies to the questions displayed below.] Satellite Systems modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures: Basic research to develop the technology Engineering design work Development of a prototype device Testing and modification of the prototype Legal fees for patent application Legal fees for successful defense of the new patent Total $4,100,000 1,200,000 610,000 410,000 81,000 41,000 $6,442,000 During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the patent. Management contends that the device represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized. Patont costs capitalized Required: 1. Determine the amount Satellite Systems should capitalize to the Patent account in the balance sheet.
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. Squarepants company made the following expenditures relating to product Y.Legal costs to file a patent on Product Y. Production of the finishedProduct would not have been undertaken without the patent 75,000Special equipment to be used solely for the development of Product YThe equipment has no other use and has an estimated useful life of 4 yrs 450,000Labor and materials costs incurred in producing a prototype 1,500,000Cost of testing the prototype 600,000 What total amount should be expensed when incurred?
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