Compute the amount of software cost amortization

Question

Aren Austin Corporation has capitalized software costs of $858,500, and sales of this product the first year totaled $423,660. Karen Austin anticipates earning $988,540 in additional future revenues from this product, which is estimated to have an economic life of 5 years. Compute the amount of software cost amortization for the first year.  

(a)	Compute the amount of software cost amortization for the first year using the percent of revenue approach.
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(b)	Compute the amount of software cost amortization for the first year using the straight-line approach