Problem
During 2019, JenStar spent $2.50 million discovering a technical software innovation that will change the way people use their computers. This amount included $0.80 million in salaries of research staff. JenStar then spent $2.44 million on the development of the software product which includes $1.94 million in software development salaries. The product was completed by December 31, 2019 and immediately went into production generating $3.60 million in sales during 2020, its first year on the market. JenStar expects the product to be useful to the company for 8 years and generate $16.80 million in additional future revenues.
Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).
I. Record all necessary journal entries for 2019. Use December 31, 2019 as the assumed date, and assume that all expenditures were made in cash. Make sure your final answer(s) are accurate to 2 decimal places.
II. Record the amortization for the year ending December 31, 2020. JenStar decided to amortize the software based on the sales generated during the year compared to the estimated total sales. Make sure your final answer(s) are accurate to 2 decimal places.