Late in 2021, a “bug” was discovered in a software product that was installed for several of your company's clients. Although the bug was not your company's fault, the CEO of the company feels strongly that company software engineers should assist the clients with a programming solution since the company
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Late in 2021, a “bug” was discovered in a software product that was installed for several of your company's clients. Although the bug was not your company's fault, the CEO of the company feels strongly that company software engineers should assist the clients with a programming solution since the company recommended the software. Clients will be contacted early in 2022 and should have fixes in place for all those affected by the end of the first quarter of 2022. The estimated cost is $7,000.
Prepare end of year
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- 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$2,400,000January 1 through February 28, 20221,000,000March 1 through April 30, 2022600,000 Athens expects a useful life of four years for the software and total revenues of $7,000,000 during that time. During 2022, revenue of $1,540,000 was recognized. Required: Prepare a journal entry in each year to record development costs for 2021 and 2022.If answered within 30mins,it would be great.thanks Eradicate Now’ is an extermination company that specializes in pest control. On September 19, 2020, the company was identified as being potentially responsible for causing serious damages to the environment by the Environmental Regulatory Agency. The company’s management team met with it’s lawyers and concluded that it is probable that it will be held responsible for the damages caused. A reasonable estimate of the damages was $2,000,000. ‘Eradicate Now’ has an insurance policy of $10,000,000 with a deductible clause of $300,000. Required How should ‘Eradicate Now’ report this information on its financial statements for the year ended December 31, 2020?RUE BENNETT Company develops software for small businesses and household computers. The majority of the company's computer programmers are working on developing software that will perform relatively specialized functions in a user-friendly manner. Before the working model is released to production for the preparation of masters and additional testing, it undergoes extensive testing. As a result of this meticulous planning, various computer software packages have been developed that have proven to be very successful in the industry. RUE BENNETT Company incurred the following costs during 2020: Cost to reproduce and prepare software for sale 200,002 Amortization of capitalized software development costs from current and prior years 94,321 Expenses related to projects after technological feasibility has been established but before software is available for commercial production 151,323 Salaries and wages of programmers doing research 910,000 Expenses related…
- In February 2021, Culverson Company began developing a new software package to be sold to customers. The software allows people to enter health information and daily eating and exercise habits to track their health status. The project was completed in November 2021 at a cost of $800,000. Of this amount, $300,000 was spent before technological feasibility was established. Culverson expects a useful life of two years for the new product and total revenues of $1,500,000. Determine the amount that Culverson should capitalize as software development costs in 2021.In March 2024, Price Company began developing a new software system to be used internally for managing its inventory. The software integrates customer orders with inventory on hand to automatically place orders for additional inventory when needed. The software then automatically records inventory as the shipment is received and read by scanners. The software development was completed in October 2024 at a cost of $150,000. Of this amount, $25,000 was spent before the application development stage was established. Price expects to use the software for at least five years. Determine the initial amount that Price should capitalize as software development costs. Capitalized costsIn March 2021, Price Company began developing a new software system to be used internally for managing its inventory. The software integrates customer orders with inventory on hand to automatically place orders for additional inventory when needed. The software then automatically records inventory as the shipment is received and read by scanners. The software development was completed in October 2021 at a cost of $150,000. Of this amount, $25,000 was spent before the application development stage was established. Price expects to use the software for at least five years. Determine the initial amount that Price should capitalize as software development costs.
- The chief executive officer of Coca Cola Company in Nizwa was very happy with his sales team for their performance in the year 2020, despite the covid-19 pandemic. Because of this development, the chief executive officer decided to include a very good package to the compensation plan for the existing salesmen and even the new recruits. Some of the benefits includes VIP membership card for golf sport, Club membership for prestigious Gym in Muscat, international medical coverage, maternity leave and many other benefits. What kind of compensation plan did the chief executive officer apply for his staff? a. Fringe benefit b. Commission O c. Bonus benefit d. Combined benefitYou are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product, "Battlin" Bobby." You had planned on using the unused capacity to start selling "BB" on the West coast in two years. You would eventually have had to purchase additional duplicating machines 10 years from today, but using the capacity for your new product will require moving this purchase up to 2 years from today. If the new machines will cost $101,000 and can be expensed under Section 179, your marginal tax rate is 21 percent, and your cost of capital is 10 percent, what is the opportunity cost associated with using the unused capacity for the new product? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Opportunity costYou are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product, “Battlin’ Bobby.” You had planned on using the unused capacity to start selling “BB” on the west coast in two years. You would eventually have had to purchase additional duplicating machines 10 years from today, but using the capacity for your new product will require moving this purchase up to two years from today. If the new machines will cost $101,000 and can be expensed under section 179, your marginal tax rate is 21 percent, and your cost of capital is 10 percent, what is the opportunity cost associated with using the unused capacity for the new product?
- You are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product, “Battlin’ Bobby.” You had planned on using the unused capacity to start selling “BB” on the West coast in two years. You would eventually have had to purchase additional duplicating machines 10 years from today, but using the capacity for your new product will require moving this purchase up to 2 years from today. If the new machines will cost $113,000 and can be expensed under Section 179, your marginal tax rate is 21 percent, and your cost of capital is 14 percent, what is the opportunity cost associated with using the unused capacity for the new product? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Your highly successful software company is considering adding a new software title to your list. If you add the new product, it will use the full capacity of your disk duplicating machines that you had planned on using for your flagship product, “Battlin’ Bobby.” You had previously planned on using the unused capacity to start selling “BB” on the West Coast in two years. Eventually, you would have had to purchase additional duplicating machines 10 years from today, but since your new product will use up the extra capacity, this will require moving this purchase up to 2 years from today. If the new machines will cost $100,000 and can be expensed under Section 179, your marginal tax rate is 21 percent, and your cost of capital is 12 percent, what is the opportunity cost associated with using the unused capacity for the new product? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.our highly successful software company is considering adding a new software title to your list. If you add the new product, it will use the full capacity of your disk duplicating machines that you had planned on using for your flagship product, “Battlin’ Bobby.” You had previously planned on using the unused capacity to start selling “BB” on the West Coast in two years. Eventually, you would have had to purchase additional duplicating machines 10 years from today, but since your new product will use up the extra capacity, this will require moving this purchase up to 2 years from today. If the new machines will cost $101,000 and can be expensed under Section 179, your marginal tax rate is 21 percent, and your cost of capital is 10 percent, what is the opportunity cost associated with using the unused capacity for the new product? Do not round intermediate calculations. Round your answer to 2 decimal places