Items 1 and 2 are based on the following:
During 2006, Pitt Corp. incurred costs to develop and produce a routine, low-risk computer software product, as follows:
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|
Completion of detailed program design |
$13,000 |
|
Costs incurred for coding and testing to establish technological feasibility |
10,000 |
|
Other coding costs after establishment of technological feasibility |
24,000 |
|
Other testing costs after establishment of technological feasibility |
20,000 |
|
Costs of producing product masters for training materials |
15,000 |
|
Duplication of computer software and training materials from product masters (1,000 units) |
25,000 |
|
Packaging product (500 units) |
9,000 |
In Pitt’s December 31, 2006 balance sheet, what amount should be reported in inventory?
- $25,000
- $34,000
- $40,000
- $49,000
In Pitt’s December 31, 2006 balance sheet, what amount should be capitalized as software cost, subject to amortization?
- $54,000
- $57,000
- $59,000
- $69,000