Problem
During 2023, Delta Company incurred costs to develop and produce a routine, low-risk computer software product as follows: Completion of detail program design 1,500,000 Cost incurred for coding and testing to establish technological feasibility 500,000 Other coding costs after establishment of technological feasibility 2,500,000 Other testing costs after establishment of technological feasibility 2,000,000 Costs of producing product masters for training materials 3,000,000 Duplication of computer software and training materials from product master 4,000,000 Packaging product 1,000,000
1. In the December 31, 2023, what amount should be capitalized as software cost subject to amortization?
2. In the December 31, 2023, what amount should be reported as inventory?