70.2K

Verified Solution

Link Copied!

Question 1. 1. (TCO C) The cost of an intangible asset includes all of the following except (Points : 5) purchase price. legal fees. other incidental expenses. All of these are included.

Question 2. 2. (TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to (Points : 5) patents, and amortized over the legal life of the patent. legal fees, and amortized over 5 years or less. expenses of the period. patents, and amortized over the remaining useful life of the patent.

Question 3. 3. (TCO C) Purchased goodwill should (Points : 5) be written off as soon as possible against retained earnings. be written off as soon as possible as an extraordinary item. be written off by systematic charges as a regular operating expense over the period benefited. not be amortized.

Question 4. 4. (TCO C) Danks Corporation purchased a patent for $450,000 on September 1, 2008. It had a useful life of 10 years. On January 1, 2010, Danks spent $110,000 to successfully defend the patent in a lawsuit. Danks feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2010? (Points : 5) $103,000. $100,000. $94,000. $78,000.

Question 5. 5. (TCO C) MaBelle Corporation incurred the following costs in 2010: Acquisition of R & D equipment with a useful life of 4 years in R & D projects $600,000 Start-up costs incurred when opening a new plant 140,000 Advertising expense to introduce a new product 700,000 Engineering costs incurred to advance a product to full production stage 350,000 What amount should MaBelle record as research and development expense in 2010? (Points : 5) $500,000 $640,000 $950,000 $1,340,000

Question 6. 6. (TCO D) A liability for compensated absences such as vacations, for which it is expected that employees will be paid, should (Points : 5) be accrued during the period when the compensated time is expected to be used by employees. be accrued during the period following vesting. be accrued during the period when earned. not be accrued unless a written contractual obligation exists.

Question 7. 7. (TCO D) Under what conditions is an employer required to accrue a liability for sick pay? (Points : 5) Sick pay benefits can be reasonably estimated. Sick pay benefits vest. Sick pay benefits equal 100% of the pay. Sick pay benefits accumulate.

Answer & Explanation Solved by verified expert

See Answer