Macrosoft (a fictional software firm) reported the following account in its year 2 balance sheet: ( $ in millions) In the notes to its financial statements, Macrosoft reported that it spent $1,427 million on computer software-related activities. Assume that these expenditures were related to projects in which technological feasibility has been proved. 1. How is Macrosoft required to account for computer software- related expenditures? 2. As of the end of year 2, how much has Macrosoft spent on existing computer software-related activities in past years? 3. As of the end of year 2, how much of its computer software- related expenditures has Macrosoft capitalized? 4. How might firms use the accounting for computer software costs to manage their earnings? Please explain with an example
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