[CPApracticer]

The answer is D, but there is no explanation. Was wondering if anyone would know the approach to this. Thanks!!

On January 1, year 1, a company capitalized $100,000 of costs for

software that is to be sold. The company amortizes the software costs on a

straight-line basis over five years. The carrying value of the software costs

on January 1, year 3, was $60,000.

As of December 31, year 3, the estimated future gross revenue to be

generated from the sale of the software is $23,000, and the estimated

future cost of disposing of the software is $8,000. What amount should the

company expense related to the software costs for the year ended

December 31, year 3?

$18,400

$20,000

$37,000

$45,000

F: 54 (4/13) 60 (4/14) 67 (9/14) 66 (10/14) 63 (11/15) 79 (2/16) PASSED
A: 60 (5/13) 80 (4/16) PASSED
R: 60 (7/13) 61 (2/15) 70 (4/15) 77 (7/15) PASSED
B: (6/16)