Test Bank for Intermediate Accounting, Eleventh Edition
— Multiple Choice — Tangible and Intangible Assets.
answer for each of the following questions and enter the identifying letter in the
When the sum-of-the-years'-digits method is used, depreciation expense for a given
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.
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:
What cost should be assigned to the land, buildings, and equipment, respectively?
$120,000, $96,000, and $24,000.
$82,500, $66,000, and $16,500.
$90,000, $72,000, and $18,000.
$60,000, $60,000, and $60,000.
In accordance with GAAP, the maximum period over which a patent can be amortized is
Purchased goodwill represents
excess of price paid over fair market value of net assets obtained in a combination.
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
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
The current year end is 12/31/05.
Venus records depreciation to the nearest month.
What is straight-line depreciation for 2005?
C - 2