2009-11-22_191101_MC2 - Copy

2009-11-22_191101_MC2 - Copy - 1(TCO C Under current...

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1. (TCO C) Under current accounting practice, intangible assets are classified as (Points: 5) amortizable or unamortizable. limited-life or indefinite-life. specifically identifiable or goodwill-type. legally restricted or goodwill-type. 2. (TCO C) Which of the following intangible assets should not be amortized? (Points: 5) Copyrights Customer lists Perpetual franchises All of these intangible assets should be amortized. 3. (TCO C) The intangible asset goodwill may be (Points: 5) capitalized only when purchased. capitalized either when purchased or created internally. capitalized only when created internally. written off directly to retained earnings. 4. (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? (Points: 5) $20,600. $20,000. $18,800. $15,600. 5. (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? (Points: 5) 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 $760,000. A deferred credit of $500,000 should be set up and then amortized to income over a period not to exceed forty years.
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6. (TCO D) Which of the following is a condition for accruing a liability for the cost of compensation for future absences? (Points: 5) The obligation relates to the rights that vest or accumulate. Payment of the compensation is probable. The obligation is attributable to employee services already performed. All of these are conditions for the accrual.
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This note was uploaded on 02/20/2012 for the course ECON 222 taught by Professor Enclair during the Spring '12 term at Guilford Tech.

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2009-11-22_191101_MC2 - Copy - 1(TCO C Under current...

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