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Question
Jade, Inc. develops and markets computer software. During 2011, one of Jade's engineers began developing a new and very innovative software product. On April 1, 2012, 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 2013 the first product sales were made. Total costs incurred were as follows:
Required:
a. How should Jade account for the costs incurred during 2011 and what is the rationale for your answer?
b. How should Jade account for the costs incurred during 2012? If your answer differs from your answer in requirement 1, explain why.
Answer
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