Aright another one…
I got this answer right, but still hv a small questions.. Per explaination, Amortization of capitalized software costs equals the greater of straight-line amortization or sales revenue from the software for the period ??? (whats the amount calculated for sale revenue here, per the information given in the question)? ÷ total projected sale
On December 31, Year 1, Byte Co. had capitalized software costs of $600,000 with an economic life of four years. Sales for Year 2 were 10% of expected total sales of the software. At December 31, Year 2, the software had a net realizable value of $480,000. In its December 31, Year 2 balance sheet, what amount should Byte report as net capitalized cost of computer software?
a.
$540,000
b.
$480,000
c.
$450,000
d.
$432,000
Explanation
Choice “c” is correct. Amortization of capitalized software costs equals the greater of straight-line amortization or sales revenue from the software for the period ÷ total projected sale.
Dec. 31, Year 1 balance $ 600,000
Year 2 amortization = 600,000 ÷ 4 = (150,000)
Dec. 31, Year 2 net capitalized cost $ 450,000
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