ExpertMedium1 markMultiple Choice
CPA · Question 28 · Area II: Balance Sheet Accounts
A company is developing software for internal use. <br/>- Preliminary project stage costs: $50,000<br/>- Application development stage costs (coding/testing): $200,000<br/>- Training costs: $30,000<br/>- Post-implementation maintenance: $20,000<br/><br/>What amount should be capitalized?
A company is developing software for internal use. <br/>- Preliminary project stage costs: $50,000<br/>- Application development stage costs (coding/testing): $200,000<br/>- Training costs: $30,000<br/>- Post-implementation maintenance: $20,000<br/><br/>What amount should be capitalized?
Answer options:
A.
$250,000
B.
$230,000
C.
$200,000
D.
$300,000
How to approach this question
Internal Use Software Rule: Expense Preliminary Stage. Capitalize Application Development Stage. Expense Post-Implementation/Training.
Full Answer
C.$200,000✓ Correct
C
ASC 350-40: Capitalize costs incurred during the Application Development Stage ($200,000). Expense Preliminary Project Stage, Training, and Maintenance.
Common mistakes
Capitalizing preliminary or training costs.
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