Computer Softw are. Phillips Corporat ion, a construction
company that specializes in home construct ion, uses special computer software
to schedule jobs and keep track of job costs. It uses generic software for
bookkeeping and spreadsheet ana lysis. During 2019, Phillips Corporation had
the following transactions relating to computer software : 1:10-46
• The corporation purchased a new computer system on May 12,
2019, for $15,000 . The system included computer hardware and built-in computer
software valued at $3,000. The corpora tion has never separated computer
software from the hardware in prior years when a computer system was purchased.
• The corporation separately purchased new bookkeeping
software on September 1, 2019, for $5,760.
• On June 1, 2019, Phillips Corporation acqu ired another
home building company to strengthen its position in higher-priced homes. The
total purchase price was $700,000 allocated to specific assets as follows:
What amount can Phillips Corporation deduct in 2019 with
respect to computer software?
Leave a Reply