Jade,Inc.develops and markets computer software.During 2013,one of Jade's engineers began developing a new and very innovative software product.On April 1,2014,a team of Jade's engineers determined that the software product was technologically feasible.Jade engineers continued to ready the software for general release and in January 2015 the first product sales were made.Total costs incurred were as follows:
$2013\quad\quad \$ 4,750,000$ (evenly throughout the year)
$2014 \quad\quad\$ 2,800,000$ (evenly throughout the year)
Required:
a.How should Jade account for the costs incurred during 2013 and what is the rationale for your answer?
b.How should Jade account for the costs incurred during 2014? If your answer differs from your answer in requirement a,explain why.

Question

Jade,Inc.develops and markets computer software.During 2013,one of Jade's engineers began developing a new and very innovative software product.On April 1,2014,a team of Jade's engineers determined that the software product was technologically feasible.Jade engineers continued to ready the software for general release and in January 2015 the first product sales were made.Total costs incurred were as follows:
$2013\quad\quad \$ 4,750,000$ (evenly throughout the year)
$2014 \quad\quad\$ 2,800,000$ (evenly throughout the year) 
Required:
a.How should Jade account for the costs incurred during 2013 and what is the rationale for your answer?
b.How should Jade account for the costs incurred during 2014? If your answer differs from your answer in requirement a,explain why.

Quizplus · Accepted Answer

The Answer of Jade,Inc.develops and markets computer software.During 2013,one of Jade's engineers began developing a new and very innovative software product.On April 1,2014,a team of Jade's engineers determined that the software product was technologically feasible.Jade engineers continued to ready the software for general release and in January 2015 the first product sales were made.Total costs incurred were as follows:
$2013\quad\quad \$ 4,750,000$ (evenly throughout the year)
$2014 \quad\quad\$ 2,800,000$ (evenly throughout the year) 
Required:
a.How should Jade account for the costs incurred during 2013 and what is the rationale for your answer?
b.How should Jade account for the costs incurred during 2014? If your answer differs from your answer in requirement a,explain why.

Jade,IncDevelops and Markets Computer Software 2013$4,750,0002013\quad\quad \$ 4,750,0002013$4,750,000 (Evenly Throughout the Year)

Jade,IncDevelops and Markets Computer Software $2013\quad\quad \$ 4,750,000$ (Evenly Throughout the Year)