Accounting For Computer Software Costs Majoli Inc Has Capitalized Computer

Accounting for Computer Software Costs Majoli Inc. has capitalized computer software costs of $3,900,000 on its new “Trenton” software package. Revenues from 2010 (first year) sales are $2,000,000. Additional future revenues from “Trenton” for the remainder of its economic life, through 2014, are estimated to be $10,000,000.

(a) What method or methods of amortization are to be applied in the write-off of capitalized computer software costs?

(b) Compute the amount of amortization for 2010 for “Trenton.”

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