107.Cranston Instrumentation sold a depreciable asset for cash of $150,000. The original cost of the asset was $600,000. Cranston recognized a gain of $22,500 on the sale. What was the amount of accumulated depreciation on the asset at the time of its sale?
A. $472,500.
B. $127,500.
C. $577,500.
D. $495,000.
108.Glouchester Associates sold office equipment for cash of $142,000. The accumulated depreciation at date of sale amounted to $138,000, and a gain of $18,000 was recognized on the sale. The original cost of the asset must have been:
A. $260,000.
B. $262,000.
C. $280,000.
D. $156,000.
109.The entry to record amortization on a copyright would include:
A. A debit to amortization expense.
B. A debit to accumulated amortization.
C. A debit to copyright.
D. A credit to amortization expense.
110.Coca-Cola's famous name printed in distinctive typeface is an example of:
A. A trademark.
B. A patent.
C. A copyright.
D. Goodwill.
111.The fair market value of Lewis Company's net identifiable assets is $5,000,000. Martin Corporation purchases Lewis' entire business for $5,800,000. Which of the following statements is
not
correct?
A. Martin Corporation paid $800,000 for goodwill generated by Lewis Company.
B. Martin feels that Lewis Company has the ability to generate earnings in excess of a normal return on net identifiable assets.
C. Martin will record amortization expense over a period not to exceed 40 years.
D. Martin Corporation will record $800,000 to goodwill, an intangible asset, which will be reported in its balance sheet.
112.The legal life of most patents is:
A. 5 years.
B. 20 years.
C. 40 years.
D. 50 years.
113.The term net identifiable assets means:
A. All assets minus all liabilities.
B. All assets except goodwill, plus all liabilities.
C. All assets except intangibles, minus all liabilities.
D. All fixed assets less liabilities.
114.All of the following may be considered intangible assets
except:
A. Accounts receivable.
B. Copyrights.
C. Franchises.
D. Goodwill.
115.International standards require that goodwill:
A. Be capitalized and amortized over 20 years or less.
B. Be capitalized and amortized over 40 years or less.
C. Be capitalized and reviewed annually and its value should be adjusted if impaired.
D. Be expensed immediately.
116.Which of the following would
not
be amortized?
A. Goodwill.
B. Copyright.
C. Franchise fee.
D. Patent.