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Test bank for intermediate accounting twelfth edition

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Test Bank for Intermediate Accounting, Twelfth Editionb.The $550,000 difference should be recognized as an extraordinary gain.c.The current assets should be recorded at $375,000 and the noncurrent assets shouldbe recorded at $875,000.d.A deferred credit of $550,000 should be set up and then amortized to income over aperiod not to exceed forty years.66.The following information is available for Barkley Company’s patents:Cost$1,720,000Carrying amount860,000Expected future net cash flows800,000Fair value640,000Barkley would record a loss on impairment of
67.Mining Company acquired a patent on an oil extraction technique on January 1, 2006 for$5,000,000.It was expected to have a 10 year life and no residual value. Mining usesstraight-line amortization for patents. On December 31, 2007, the expected future cashflows expected from the patent were expected to be $600,000 per year for the next eightyears. The present value of these cash flows, discounted at Mining’s market interest rate,is $2,800,000.At what amount should the patent be carried on the December 31, 2007balance sheet?
68.Malrom Manufacturing Company acquired a patent on a manufacturing process onJanuary 1, 2006 for $10,000,000. It was expected to have a 10 year life and no residualvalue. Malrom uses straight-line amortization for patents. On December 31, 2007, theexpected future cash flows expected from the patent were expected to be $800,000 peryear for the next eight years. The present value of these cash flows, discounted atMalrom’s market interest rate, is $4,800,000. At what amount should the patent be carriedon the December 31, 2007 balance sheet?
69.Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for$2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The netidentifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 atthat time. What amount of loss on impairment of goodwill should Twilight record in 2008?a.$-0-b.$125,000c.$175,000d.$300,000

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Term
Fall
Professor
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Tags
Balance Sheet, Depreciation, Generally Accepted Accounting Principles

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