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raketka [301]
3 years ago
7

Very early in 2018, while developing software for sale to others, after achieving technological feasibility but before the comme

ncement of commercial production, X Company incurred $320,000 to produce product masters and to test the software. X Company estimated that the software will be sold for a total of 10 years. After nearly a full year of selling, X had revenues from software sales of $120,000 in 2018. Sales in future periods are expected to amount to $680,000. Costs associated with producing and packaging the software approximate 10% of revenues. What portion, if any, of the $320,000 will be recognized in income in 2018?
a. $48,000
b. $32,000
c. $0
d. $320,000
Business
1 answer:
finlep [7]3 years ago
7 0

Answer:

c. 48,000

Explanation:

The amount charges is based off of the total sales figure and the current year sales percentage.

We can calculate the current year's charge as follows,

Charge = (120,000 / 800,000) * 320,000

= $48,000

Whwre, 800,000 is the total sales figure (120,000 + 680,000).

Hopw that helps.

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