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Listed Below Are Various Methods of Allocating the Cost of Certain

Question 166

Matching

Listed below are various methods of allocating the cost of certain capital assets over their useful lives, each followed by a descriptive statement. Match the the statements to their methods

Premises:
Purchased patent
Basket purchase of two commercial buildings
Advertising costs
Intangible assets with indefinite live
Legal costs incurred to defend a copyright from infringement
Research costs incurred internally
Cost of timberland
Five-acre parcel of land where a firm's headquarters is located
Purchased drilling equipment
Goodwill acquired in a business combination
Interest on self-constructed assets
Development costs for a proven new product
Responses:
Capitalized and depreciated/amortized/depleted
Capitalized
Evaluated for impairment
Expensed
None of these methods

Correct Answer:

Purchased patent
Basket purchase of two commercial buildings
Advertising costs
Intangible assets with indefinite live
Legal costs incurred to defend a copyright from infringement
Research costs incurred internally
Cost of timberland
Five-acre parcel of land where a firm's headquarters is located
Purchased drilling equipment
Goodwill acquired in a business combination
Interest on self-constructed assets
Development costs for a proven new product
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