Devry Intermediate Ii Week 1 Quiz

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Question : (TCO C) Which of the following should not be reported in the income statement? Student Answer: Goodwill amortization Trade name amortization expense Patent impairment losses All of the above Instructor Explanation: Goodwill is not amortized. Purchase of trade name (with a definite period of time) could result in trade name amortization. Chapter 12 Points Received: 5 of 5 Comments: Question 2. Question : (TCO C) Which of the following costs incurred with developing computer software for internal use should be capitalized? Student Answer: Evaluation of alternatives Coding Training Maintenance Instructor Explanation: Software development for internal use is not R & D, and thus can be capitalized. Coding comes under this definition. Chapter 12 Points Received: 5 of 5 Comments: Question 3. Question : (TCO C) Alonzo Co. acquires three patents from Shaq Corp. for a total of $360,000. The patents were carried on Shaq’s books as follows: Patent AA, $5,000; Patent BB, $2,000; and Patent CC, $3,000. When Alonzo acquired the patents, their fair market values were: Patent AA, $20,000; Patent BB, $240,000; and Patent CC, $60,000. At what amount should Alonzo record Patent BB? Student Answer: $120,000 $240,000 $2,000 $270,000 Instructor Explanation: $360,000 X ($240,000 / $320,000) = $270,000. Chapter 12 Points Received: 5 of 5 Comments: Question 4. Question : (TCO C) Day Company purchased a patent on January 1, 2010 for $360,000. The patent had a remaining useful life of 10 years at that date. In January of 2011, Day successfully defends the patent at a cost of $162,000, extending the life of the patent to 12/31/22. What amount of amortization expense would Kerr record in 2011?

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