(TCO C) Under current accounting practice, intangible assets are classified as
amortizable or unamortizable.
limited-life or indefinite-life.
specifically identifiable or goodwill-type.
legally restricted or goodwill-type.
(TCO C) Which of the following intangible assets should
All of these intangible assets should be amortized.
(TCO C) The intangible asset goodwill may be
capitalized only when purchased.
capitalized either when purchased or created internally.
capitalized only when created internally.
written off directly to retained earnings.
(TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had a useful life of
ten years. On January 1, 2010, ELO spent $22,000 to successfully defend the patent in a lawsuit. ELO
feels that as of that date, the remaining useful life is five years. What amount should be reported for
patent amortization expense for 2010?
(TCO C) During 2011, Bond Company purchased the net assets of May Corporation for $1,000,000.
On the date of the transaction, May had $300,000 of liabilities. The fair value of May's assets when
acquired were as follows:
How should the $500,000 difference between the fair value of the net assets acquired ($1,500,000) and
the cost ($1,000,000) be accounted for by Bond?
The $500,000 difference should be credited to retained earnings.
The $500,000 difference should be recognized as a gain.
The current assets should be recorded at $540,000 and the noncurrent assets should be recorded at
A deferred credit of $500,000 should be set up and then amortized to income over a period not to
exceed forty years.