AE12-18

# AE12-18 - the nearest dollar Straight-line method \$ 786,600...

This preview shows page 1. Sign up to view the full content.

AE12-18 Correct. (Accounting for Computer Software Costs) Majoli Inc. has capitalized computer software costs of \$3,933,000 on its new "Trenton" software package. Revenues from 2010 (first year) sales are \$2,443,900. Additional future revenues from "Trenton" for the remainder of its economic life, through 2014, are estimated to be \$12,219,500. Compute the amount of amortization for 2010 for "Trenton" using the: (Round your answers to
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the nearest dollar.) Straight-line method \$ 786,600 Percent of revenue method \$ 655,500 How much amortization should be recognized for 2010 for "Trenton"? \$ 786,600 Straight-line method: 1/5 × \$3,933,000 = \$786,600 Percent of revenue approach: (\$2,443,900 ÷ \$14,663,400) × \$3,933,000 = \$655,500 Amortization recognized for 2007 should be \$786,600 by the straight-line method because it results in the greater amount....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online