General products company bought special products

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8. General Products Company bought Special Products Division in 2006 and appropriately booked $250,000 of goodwill related to the purchase. On December 31, 2007, the fair value of Special Products Division is $2,000,000 and it is carried on General Product’s books for a total of $1,700,000 including the goodwill. An analysis of Special Products Division’s assets indicates that goodwill of $200,000 exists on December 31, 2007. What goodwill impairment should be recognized by General Products in 2007? a. $0 b. $200,000 c. $50,000 d. $300,000 9. MaBelle Corporation incurred the following costs in 2008: Acquisition of R&D equipment with a useful life of 4 years In R&D projects $160,000 Start-up costs incurred when opening a new plant 140,000 Advertising expenses to introduce a new product 700,000 Engineering costs incurred to advance a product to Full production state 350,000 What amount should MaBelle record as research & development expense in 2008? 10. On May 5, 2007, Flynn Corp. exchanged 2,000 shares of its $25 par value treasury common stock for a patent owned by Denson Co. The treasury shares were acquired in 2006 for $45,000. At May 5, 2007, Flynn’s common stock was quoted at $32 per share, and the patent had a carrying value of $55,000 on Denson’s books. Flynn should record the patent at
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