Acc 551 Midterm Exam Paper

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ACCT 551 Midterm Exam Question Answers Paste the above URL into your browser For Any Information or Any Class which you did not find on Our Website, Just Hit US Email On below address Email Address: Visit Our Website: ACCT 551 Midterm Exam Question Answers 1. Question:: (TCO C) The cost of an intangible asset includes all of the following except 2. Question: : (TCO C) Which of the following is not an intangible asset? 3. Question: : (TCO C) The intangible asset goodwill may be 4. Question: : (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had…show more content…
Question: : (TCO D) On December 31, 2010, Irey Co. has $2,000,000 of short-term notes payable due on February 14, 2011. On January 10, 2011, Irey arranged a line of credit with County Bank which allows Irey to borrow up to $1,700,000 at one percent above the prime rate for three years. On February 2, 2011, Irey borrowed $1,700,000 from County Bank and used $300,000 additional cash to liquidate $1,700,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2010 balance sheet which is issued on March 5, 2011 is 9. Question: : (TCO D) Tender Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $500,000. What is the required journal entry as a result of this litigation? 10. Question: : (TCO D) Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a discount this indicates…show more content…
Question: : (TCO D) A company issues $5,000,000, 7.8/%, 20-year bonds to yield 8% on January 1, 2010. Interest is paid on December 31. The proceeds from the bonds are $4,901,036. Using effective-interest amortization, how much interest expense will be recognized in 2010? 15. Question: : (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for $3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium. At the end of the first year, Martinez should report unamortized bond premium of: 1. Question: : (TCO C) Sisco Co. purchased a patent from Thornton Co. for $180,000 on July 1, 2007. Sisco amortizes the patent over a period of 10 years. Expenditures of $92,000 for successful litigation in defense of the patent were paid on July 1, 2011. Sisco estimates that the useful life of the patent will be increase by 10 years from the date of litigation becasue of successfully defending it Instructions: Prepare a computation of the carrying value of the patent at December 31,

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