COMPREHENSIVE EXAMINATION C
— Multiple Choice — Tangible and Intangible Assets.
answer for each of the following questions and enter the identifying
letter in the space provided.
When the sum-of-the-years'-digits method is used, depreciation expense for
a given asset will
decline by a constant amount each year.
be the same each year.
decrease rapidly and then slowly over the life of the asset.
vary from year to year in relation to changes in output.
Perry Corporation acquired land, buildings, and equipment from a bankrupt
company at a lump-sum price of $275,000. At the time of acquisition Perry
paid $25,000 to have the assets appraised. The appraisal disclosed the
What cost should be assigned to the land, buildings, and equipment,
$200,000, $160,000, and $40,000.
$137,500, $110,000, and $27,500.
$150,000, $120,000, and $30,000.
$100,000, $100,000, and $100,000.
In accordance with GAAP, the maximum period over which a patent can be
Purchased goodwill represents
excess of price paid over fair market value of net assets obtained in a
excess of price paid over the book value of the net assets obtained in a
the difference in the aggregate amount of the market prices of the stock
of the combining companies.
a tangible asset.