Acct Quiz

Quiz Chpts 12 & 13

84. 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?

a. $103,000.

b. $100,000.

c. $94,000.

d. $78,000.

85. The general ledger of Vance Corporation as of December 31, 2011, includes the following accounts:

Copyrights $ 30,000

Deposits with advertising agency (will be used to promote goodwill) 27,000

Discount on bonds payable 70,000

Excess of cost over fair value of identifiable net assets of

Acquired subsidiary 390,000

Trademarks 90,000

In the preparation of Vance's balance sheet as of December 31, 2011, what should be reported as total intangible assets?

a. $480,000.

b. $507,000.

c. $510,000.

d. $537,000.

90. Blue Sky Company’s 12/31/10 balance sheet reports assets of $5,000,000 and liabilities of $2,000,000. All of Blue Sky’s assets’ book values approximate their fair value, except for land, which has a fair value that is $300,000 greater than its book value. On 12/31/10, Horace Wimp Corporation paid $5,100,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?

a. $ -0-

b. $100,000

c. $1,800,000

d. $2,100,000

94. During 2011, Bond Company purchased the net assets of May Corporation for $1,000,000. On the date of the transaction, May had $300,000 of liabilities. The fair value of May's assets when acquired were as follows:

Current assets $ 540,000

Noncurrent assets 1,260,000

$1,800,000

How should the $500,000 difference between the fair value of the net assets acquired...