On August 1, 2018, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2019, and the program was available for release on March 31, 2019. Development costs were incurred as follows:

$\begin{array}{lr}
\text { August } 1 \text { through December } 31,2018 & \$ 6,300,000 \
\text { January } 1 \text { through January } 31,2019 & 1,200,000 \
\text { February } 1 \text { through March } 31,2019 & 1,600,000
\end{array}$

Reliable expects a useful life of five years for the software and total revenues of $8,000,000 during that time. During 2019, revenue of $2,000,000 was recognized.

Required:
1. Prepare the journal entries to record the development costs in 2018 and 2019.
2. Calculate the required amortization for 2019.

Question

On August 1, 2018, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2019, and the program was available for release on March 31, 2019. Development costs were incurred as follows:

$\begin{array}{lr}
\text { August } 1 \text { through December } 31,2018 & \$ 6,300,000 \
\text { January } 1 \text { through January } 31,2019 & 1,200,000 \
\text { February } 1 \text { through March } 31,2019 & 1,600,000
\end{array}$

Reliable expects a useful life of five years for the software and total revenues of $8,000,000 during that time. During 2019, revenue of $2,000,000 was recognized.

Required:
1. Prepare the journal entries to record the development costs in 2018 and 2019.
2. Calculate the required amortization for 2019.

Quizplus · Accepted Answer

The Answer of On August 1, 2018, Reliable Software began developing a software program to allow individuals to customize their investment portfolios. Technological feasibility was established on January 31, 2019, and the program was available for release on March 31, 2019. Development costs were incurred as follows:

$\begin{array}{lr}
\text { August } 1 \text { through December } 31,2018 & \$ 6,300,000 \
\text { January } 1 \text { through January } 31,2019 & 1,200,000 \
\text { February } 1 \text { through March } 31,2019 & 1,600,000
\end{array}$

Reliable expects a useful life of five years for the software and total revenues of $8,000,000 during that time. During 2019, revenue of $2,000,000 was recognized.

Required:
1. Prepare the journal entries to record the development costs in 2018 and 2019.
2. Calculate the required amortization for 2019.

On August 1, 2018, Reliable Software Began Developing a Software