On January 1, 2024, a company began development of new software. The project reached technological...
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Accounting
On January 1, 2024, a company began development of new software. The project reached technological feasibility on September 1, additional development costs for coding and testing were incurred through December 1, advertisement and distribution costs were incurred through December 31, and then the product was released for sale to customers early the following year. Below are the costs incurred at each stage:
Prior to September 1 to help reach technological feasibility
$ 500,000
From September 1 to December 1 for additional development
$ 300,000
From December 1 to December 31 for advertisement and distribution
$ 150,000
The economic life of the software is estimated at three years. For what amount will software be capitalized in 2024?
Multiple Choice
$950,000
$800,000
$300,000
$450,000
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