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bekas [8.4K]
3 years ago
5

On September 30, 2021, Athens Software began developing a software program to shield personal computers from malware and spyware

. Technological feasibility was established on February 28, 2022, and the program was available for release on April 30, 2022. Development costs were incurred as follows: September 30 through December 31, 2021 $ 2,300,000 January 1 through February 28, 2022 900,000 March 1 through April 30, 2022 500,000 Athens expects a useful life of four years for the software and total revenues of $6,000,000 during that time. During 2022, revenue of $1,080,000 was recognized.Required:
1. Prepare the journal entries to record the development costs in 2016 and 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Calculate the required amortization for 2017. (Enter your answer in whole dollars.)
Business
1 answer:
xxMikexx [17]3 years ago
6 0

Answer:

1. Prepare the journal entries to record the development costs in 2021 and 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

December 31, 2021

Dr Research and development expenses 2,300,000

    Cr Cash 2,300,000

February 28, 2022

Dr Research and development expenses 900,000

    Cr Cash 900,000

April 30, 2022

Dr Software development 500,000

    Cr Cash 500,000

2. Calculate the required amortization for 2022. (Enter your answer in whole dollars.)

  • $66,667 (8 months, from May to December)

Explanation:

development costs:

September 30, 2021 to December 31, 2021 = $2,300,000

January 1, 2022 to February 28, 2022 =  $900,000

R&D costs that must be expensed = $3,200,000

R&D costs that can be capitalized (after technological feasibility is obtained) = $500,000

Software developing companies can capitalize costs incurred after technological feasibility but before the software is launched.

Capitalized costs can be amortized over 60 months:

$500,000 x 8/60 = $66,666.67

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The average accounts receivable balance is closest to $120,000.

<h3>What is the average accounts receivable balance?</h3>

The average accounts receivable balance is the addition of beginning and ending accounts receivable divided by two.

For instance, if the average accounts receivable balance is $120,000, then the total accounts receivable is $240,000 ($120,000 x 2).

<h3>Data and Calculations:</h3>

Assets turnover = 1.8

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Average total assets = $600,000

Accounts receivable turnover = 9.00

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Net sales = $1,080,000 ($600,000 x 1.8)

Average Accounts Receivable = $120,000 ($1,080,000/9)

Thus, the average accounts receivable balance is closest to $120,000.

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2 years ago
"Raising the interest rate on reserves above the current fed funds rate means that the floor of reserve demand will push the equ
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Answer:

True.

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Raising the interest rate on reserves above the current fed funds rate means that the floor of reserve demand will push the equilibrium fed funds rate up along with the interest rate on reserves. Both borrowed reserves and non-borrowed reserves will remain the same.

However, when the Fed reduces the interest rate on reserves below the current fed funds rate, it simply means that, there would be a leftward shift in the demand for reserve line, at any given interest rate. Thus, causing the fed funds rate to decrease, while borrowed reserves and non-borrowed reserves remain unchanged.

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Victoria is creating a brochure for her photography studio. She designed the layout and placed a photo in the center of the page
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Tetra Co. uses the perpetual inventory system and a FIFO cost flow method. On January 1, the company purchased 2,000 units of in
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Answer:

C. Increase cost of goods sold and decrease inventory by $16,400

Explanation:

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The _________ method of determining an applicant's score is based on the expert judgment of the manager.
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The method which is used to determine an applicant's score which is based on the expert judgement of the manager is clinical prediction.

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The term which is most suitable for the sentence is clinical prediction.

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Hence the method which is used to determine an applicant's score which is based on the expert judgement of the manager is clinical prediction.

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