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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 per the year ended December 31, year 3?
A. $18,400
B. $20,000
C. $37,000
D. $45,000
answer D
I have been looking at this question a few days, and I am just wondering, how the heck do you come to the 45,000 number?
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