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

question 42

Essay

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.

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Definitions:

Accounts Balances

The amounts in accounts that represent the difference between the debits and credits recorded.

Retrograde Pyelography

A radiologic procedure in which the doctor injects a contrast medium through a urethral catheter and takes a series of X-rays to evaluate the function of the ureters, bladder, and urethra.

Contrast Medium

A substance used in medical imaging to improve the visibility of internal body structures.

Urethral Catheter

A flexible tube inserted through the urethra into the bladder to drain urine.