Valix Finacc vol 1 Problem 20-34

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 20 Problem 20-34

1.       Designing and planning                                                                                        1,000,000

      Code development                                                                                              1,500,000

      Testing                                                                                                                  __500,000

      Total R and D expense in 2008                                                                               3,000,000

      The cost of producing the product master of P2,500,000 is capitalized as             

      software cost to be subsequently amortized.

1.       Cost of producing the software program in 2009                                                1,000,000

      Amortization of software cost (2,500,000 / 4)                                                           625,000

      Total expense in 2009                                                                                             1,625,000