Question 1

The total amount of patent cost amortized to date is usually

Accepted Answer

A)  shown in a separate Accumulated Patent Amortization account which is shown contra to the Patents account. 
B)  shown in the current income statement. 
C)  reflected as credits in the Patents account. 
D)  reflected as a contra property, plant and equipment item. 
A)  shown in a separate Accumulated Patent Amortization account which is shown contra to the Patents account. 
B)  shown in the current income statement. 
C)  reflected as credits in the Patents account. 
D)  reflected as a contra property, plant and equipment item.

Question 2

12-131Weaver Corporation purchased Merando Company 3 years ago and at that time recorded goodwill of $600,000. The Division's net assets, including the goodwill, have a carrying amount of $1,200,000. The fair value of the division is estimated to be $1,100,000 and implied goodwill is $525,000. Prepare Weaver's journal entry, if necessary, to record impairment of the goodwill.

Accepted Answer

@#IMG-DLM& The fair value of the reporting unit ($

Question 3

On June 30, 2015, Cey, Inc. exchanged 6,000 shares of Seely Corp. $30 par value common stock for a patent owned by Gore Co. The Seely stock was acquired in 2015 at a cost of $165,000. At the exchange date, Seely common stock had a fair value of $46 per share, and the patent had a net carrying value of $330,000 on Gore's books. Cey should record the patent at

Accepted Answer

A)  $165,000. 
B)  $180,000. 
C)  $276,000. 
D)  $330,000. 
A)  $165,000. 
B)  $180,000. 
C)  $276,000. 
D)  $330,000.

Question 4

The notes to the financial statements should include information about acquired intangible assets, and aggregate amortization expense for how many succeeding years?

Accepted Answer

A)  6 
B)  5 
C)  4 
D)  3 
A)  6 
B)  5 
C)  4 
D)  3

Question 5

Day Company purchased a patent on January 1, 2014 for $480,000. The patent had a remaining useful life of 10 years at that date. In January of 2015, Day successfully defends the patent at a cost of $216,000, extending the patent's life to 12/31/26. What amount of amortization expense would Day record in 2015?

Accepted Answer

A)  $48,000 
B)  $54,000 
C)  $58,000 
D)  $72,000 
A)  $48,000 
B)  $54,000 
C)  $58,000 
D)  $72,000

Question 6

Jeff Corporation purchased a limited-life intangible asset for $225,000 on May 1, 2013. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2015?

Accepted Answer

A)  $ -0- 
B)  $45,000 
C)  $60,000 
D)  $67,500 
A)  $ -0- 
B)  $45,000 
C)  $60,000 
D)  $67,500

Question 7

Malrom Manufacturing Company acquired a patent on a manufacturing process on January 1, 2014 for $3,750,000. It was expected to have a 10 year life and no residual value. Malrom uses straight-line amortization for patents. On December 31, 2015, the expected future cash flows expected from the patent were expected to be $300,000 per year for the next eight years. The present value of these cash flows, discounted at Malrom's market interest rate, is $1,800,000. At what amount should the patent be carried on the December 31, 2015 balance sheet?

Accepted Answer

A)  $3,750,000 
B)  $ 3,000 
C)  $2,400,000 
D)  $1,800,000 
A)  $3,750,000 
B)  $ 3,000 
C)  $2,400,000 
D)  $1,800,000

Question 8

On May 5, 2015, MacDougal Corp. exchanged 4,000 shares of its $25 par value treasury common stock for a patent owned by Masset Co. The treasury shares were acquired in 2014 for $90,000. At May 5, 2015, MacDougal's common stock was quoted at $34 per share, and the patent had a carrying value of $110,000 on Masset's books. MacDougal should record the patent at

Accepted Answer

A)  $90,000. 
B)  $100,000. 
C)  $110,000. 
D)  $136,000. 
A)  $90,000. 
B)  $100,000. 
C)  $110,000. 
D)  $136,000.

Question 9

In accounting for internally generated intangible assets, U.S. GAAP requires that

Accepted Answer

A)  all costs, no matter how immaterial, be capitalized. 
B)  only material costs be capitalized. 
C)  planned costs be capitalized, while costs in excess of plan be expensed. 
D)  all costs be expensed. 
A)  all costs, no matter how immaterial, be capitalized. 
B)  only material costs be capitalized. 
C)  planned costs be capitalized, while costs in excess of plan be expensed. 
D)  all costs be expensed.

Question 10

The following information is available for Barkley Company's patents:   Barkley would record a loss on impairment of

Accepted Answer

A)  $ 120,000. 
B)  $ 420,000. 
C)  $1,720,000. 
D)  $1,840,000. 
A)  $ 120,000. 
B)  $ 420,000. 
C)  $1,720,000. 
D)  $1,840,000.

Question 11

IFRS and U.S. GAAP are similar in the accounting for impairments of assets held for disposal.

Accepted Answer

A) True 
 B)False

Question 12

Blue Sky Company's 12/31/15 balance sheet reports assets of $6,000,000 and liabilities of $2,400,000. All of Blue Sky's assets' book values approximate their fair value, except for land, which has a fair value that is $360,000 greater than its book value. On 12/31/15, Horace Wimp Corporation paid $6,120,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?

Accepted Answer

A)  $ -0- 
B)  $120,000 
C)  $2,160,000 
D)  $2,520,000 
A)  $ -0- 
B)  $120,000 
C)  $2,160,000 
D)  $2,520,000

Question 13

Barkley Corp. obtained a trade name in January 2013, incurring legal costs of $36,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2014, incurring $9,800 in legal fees. At the beginning of 2015, based on new marketing research, Barkley determines that the fair value of the trade name is $30,000. Estimated total future cash flows from the trade name are $32,000 on January 4, 2015.

Instructions
Prepare the necessary journal entries for the years ending December 31, 2013, 2014, and 2015. Show all computations.

Accepted Answer

The answer of Barkley Corp. obtained a trade name in...

Question 14

Which of the following should be reported under the "Other Expenses and Losses" section of the income statement?

Accepted Answer

A)  Goodwill impairment losses. 
B)  Trade name amortization expense. 
C)  Patent impairment losses 
D)  None of these answer choices are correct. 
A)  Goodwill impairment losses. 
B)  Trade name amortization expense. 
C)  Patent impairment losses 
D)  None of these answer choices are correct.

Question 15

Under U.S. GAAP, impairment loss is measured as the excess of the carrying amount over the assets discounted cash flow.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is considered research and development costs?

Accepted Answer

A)  Planned search or critical investigation aimed at discovery of new knowledge. 
B)  Research costs incurred under contract with another company. 
C)  Commissions to sales staff marketing a new product. 
D)  Cost of marketing research to promote a new product. 
A)  Planned search or critical investigation aimed at discovery of new knowledge. 
B)  Research costs incurred under contract with another company. 
C)  Commissions to sales staff marketing a new product. 
D)  Cost of marketing research to promote a new product.

Question 17

ELO Corporation purchased a patent for $225,000 on September 1, 2013. It had a useful life of 10 years. On January 1, 2015, ELO spent $55,000 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2015?

Accepted Answer

A)  $51,500. 
B)  $50,000. 
C)  $47,000. 
D)  $39,000. 
A)  $51,500. 
B)  $50,000. 
C)  $47,000. 
D)  $39,000.

Question 18

Which of the following costs of goodwill should be amortized over their estimated useful lives?

Accepted Answer

The answer of Which of the following costs of goodwill...

Question 19

The rules used to account for impairments of limited-life intangible assets are different from the rules used to account for impairments of plant and equipment.

Accepted Answer

A) True 
 B)False

Question 20

Carrying value of patent.Sisco Co. purchased a patent from Thornton Co. for $620,000 on July 1, 2012. Expenditures of $119,000 for successful litigation in defense of the patent were paid on July 1, 2015. Sisco estimates that the useful life of the patent will be 20 years from the date of acquisition.

Instructions
Prepare a computation of the carrying value of the patent at December 31, 2015.

Accepted Answer

The answer of Carrying value of patent.Sisco Co. purchased a...

The total amount of patent cost amortized to date is usually

The notes to the financial statements should include information about acquired intangible assets, and aggregate amortization expense for how many succeeding years?

Jeff Corporation purchased a limited-life intangible asset for $225,000 on May 1, 2013. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2015?

In accounting for internally generated intangible assets, U.S. GAAP requires that

The following information is available for Barkley Company's patents: Barkley would record a loss on impairment of

IFRS and U.S. GAAP are similar in the accounting for impairments of assets held for disposal.

Which of the following should be reported under the "Other Expenses and Losses" section of the income statement?

Under U.S. GAAP, impairment loss is measured as the excess of the carrying amount over the assets discounted cash flow.

Which of the following is considered research and development costs?

Which of the following costs of goodwill should be amortized over their estimated useful lives?

The rules used to account for impairments of limited-life intangible assets are different from the rules used to account for impairments of plant and equipment.

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

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Exam 12: Intangible Assets

The total amount of patent cost amortized to date is usually

The notes to the financial statements should include information about acquired intangible assets, and aggregate amortization expense for how many succeeding years?

Jeff Corporation purchased a limited-life intangible asset for $225,000 on May 1, 2013. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2015?

In accounting for internally generated intangible assets, U.S. GAAP requires that

The following information is available for Barkley Company's patents: Barkley would record a loss on impairment of

IFRS and U.S. GAAP are similar in the accounting for impairments of assets held for disposal.

Which of the following should be reported under the "Other Expenses and Losses" section of the income statement?

Under U.S. GAAP, impairment loss is measured as the excess of the carrying amount over the assets discounted cash flow.

Which of the following is considered research and development costs?

Which of the following costs of goodwill should be amortized over their estimated useful lives?

The rules used to account for impairments of limited-life intangible assets are different from the rules used to account for impairments of plant and equipment.

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters