Problem:
XYZ's Software Development Division (SDD) has developed several architectural design software packages. One software package that they have developed is being sold to an English Company for $310,000 or 385,000 pounds. The cost of developing the software was $255,000. As payment, XYZ has accepted a note receivable that is due in 5 years.
SDD has also developed a second software package. They incurred development costs of $500,000. They are trading this software package in exchange for a small office building. The fair market value of this building is $675,000.
In an Excel spreadsheet, make the appropriate accounting entry on XYZ's books for each software sale. Include a discussion about the accounting issues involved for each sale.
Use $285,000 as the discounted value of the note receivable.