Chapter 12 Quiz Ver1 with answers

Chapter 12 Quiz Ver1 with answers - Name: _ ACCT 304 - Fall...

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Name: ___________________________________________ ACCT 304 - Fall 2009 – Chapter 12 Quiz – Version1 Instructions: Please show all work. Please write your answer CLEARLY in the answer blank on the answer sheet. Each question is worth 2.5 points. 1. Fehr Co. purchased a patent from Wells Co. for $180,000 on July 1, 2004 . Expenditures of $51,000 for successful litigation in defense of the patent were paid on July 1, 2007 . Fehr estimates that the useful life of the patent will be 20 years from the date of acquisition . What is the carrying value of the patent at December 31, 2007 (after depreciation is taken for 2007)? ANSWER: I apologize for not explaining this one very well in class –made it more confusing than it should have been - here is the correct answer! Cost of patent $180,000 Amortization 7/1/04 to 7/1/07 [($180,000 ÷ 20) × 3] (27,000 ) Carrying value at 7/1/07 153,000 Cost of successful defense 51,000 Carrying value 204,000 Amortization 7/1/07 to 12/31/07 [$204,000/(20 – 3)
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Chapter 12 Quiz Ver1 with answers - Name: _ ACCT 304 - Fall...

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