comp_examc - COMPREHENSIVE EXAMINATION C PART 3 (Chapters...

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COMPREHENSIVE EXAMINATION C PART 3 (Chapters 10–14) Approximate Problem Topic Time C-I Multiple Choice—Tangible and Intangible Assets. 39 min. C-II Assignment of Costs. 6 min. C-III Research and Development. 15 min. C-IV Exchange of Assets. 25 min. C-V Long-Term Debt. 40 min. C-VI Depreciation Methods. 20 min. C-VII Current Liabilities. 28 min. C-VIII *Troubled Debt Restructurings. 10 min. 183 min. *This topic is dealt with in an Appendix to the chapter.
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Test Bank for Intermediate Accounting, Eleventh Edition Problem C-I — Multiple Choice — Tangible and Intangible Assets. Choose the best answer for each of the following questions and enter the identifying letter in the space provided. _____ 1. When the sum-of-the-years'-digits method is used, depreciation expense for a given asset will a. decline by a constant amount each year. b. be the same each year. c. decrease rapidly and then slowly over the life of the asset. d. vary from year to year in relation to changes in output. _____ 2. Maris Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $165,000. At the time of acquisition Maris paid $15,000 to have the assets appraised. The appraisal disclosed the following values: Land $96,000 Buildings 76,800 Equipment 19,200 What cost should be assigned to the land, buildings, and equipment, respectively? a. $120,000, $96,000, and $24,000. b. $82,500, $66,000, and $16,500. c. $90,000, $72,000, and $18,000. d. $60,000, $60,000, and $60,000. _____ 3. In accordance with GAAP, the maximum period over which a patent can be amortized is a. 20 years. b. 28 years. c. 40 years. d. 50 years. _____ 4. Purchased goodwill represents a. excess of price paid over fair market value of net assets obtained in a combination. b. excess of price paid over the book value of the net assets obtained in a combination. c. the difference in the aggregate amount of the market prices of the stock of the combining companies. d. a tangible asset. Use the following data to answer questions 5 through 9: Venus Company purchased a new piece of equipment on July 1, 2004 at a cost of $600,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $50,000. The current year end is 12/31/05. Venus records depreciation to the nearest month. _____ 5. What is straight-line depreciation for 2005? a. $55,000. b. $60,000. c. $110,000. d. $120,000. C - 2
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Comprehensive Examination C _____ 6. What is sum-of-the-years'-digits depreciation for 2005? a. $146,666. b. $165,000. c. $180,000. d. $183,333. _____ 7. What is double-declining-balance depreciation for 2005? a. $144,000. b. $192,000. c. $220,000. d. $240,000. _____ 8. If Venus expensed the total cost of the equipment at 7/1/04, what was the effect on 2004 and 2005 income before taxes, assuming Venus uses straight-line depreciation? a.
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This note was uploaded on 05/01/2011 for the course ACCT 3341 taught by Professor Dr.ramaswamy during the Spring '09 term at University of St. Thomas-Texas.

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comp_examc - COMPREHENSIVE EXAMINATION C PART 3 (Chapters...

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