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

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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
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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....
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