Very early in 2018, while developing software for sale to others, after achieving technological feasibility but before the commencement of commercial production, x company incurred $320,000 to produce product masters and to test the software. x company es

Costs incurred after reaching technological feasibility but before commercial production, such as the production of product masters, are capitalized and amortized.

The amount of amortization will be the greater amount when calculated under both the straight-line method and the volume of output approach.

Under straight-line, amortization will be 10% of $320,000 or $32,000.

Under the volume of output approach the ratio of current sales,$120,000, to the total of current and estimated future sales, $120,000 + $680,000 or $800,000, is multiplied by the $320,000 carrying value of the amortizable costs to determine amortization of , $120,000/$800,000 × $320,000 = $48,000.

Since it is larger, $48,000 will be the amount of amortization in 2018.

In addition, X will determine if the carrying value of the software exceeds its net realizable value is $612,000, which exceeds the carrying value of the software indicating no need for further amortization

Explanation:

answer; ///decision making under risk;

answer(d) the growth of consumption is likely to remain sluggish even as the economy begins to recover.;