Acct Tao Ma Final Study prep

which of the following is a type of technology-related intangible asset? a. Copyright b. Franchise c. License d. Patent

Patent

Which of the following intangible assets should not be amortized? a. Copyrights b. Customer lists c. Perpetual franchises d. All of these intangible assets should be amortized.

Perpetual franchises

Muggs Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a Wreck Em Tech embroidered leash. The leashes cost Muggs $4 each. Muggs estimates that 45 percent of the coupons will be redeemed. Data for 2017 (2018) are as follows... Bags of dog food sold: 500,000 (600,000)... Leashes purchased: 18,000 (22,000)... Coupons redeemed: 120,000 (150,000). The premium liability at December 31, 2018 is

Premium liability at December 31, 2017=[(500000*45%/8)-(120000/8)]*4= $52500 Premium liability at December 31, 2018=52500+ [(600000*45%/8)-(150000/8)]*4= $112500

When a company develops a trademark the costs directly related to securing it should generally be capitalized. Which of the following costs associated with a trademark would not be capitalized? a. Attorney fees. b. Consulting fees. c. Research and development fees. d. Design costs.

Research and Development Costs

Which of the following costs incurred internally to create an intangible asset is generally expensed? a. Research and development costs. b. Filing costs. c. Legal costs. d. All of these answer choices are correct.

Research and Development Costs

Which of the following is not an intangible asset? a. Trade name b. Research and development costs c. Franchise d. Copyrights

Research and development costs

Intangible assets are reported on the balance sheet

Separately from other Assets

IFRS allows reversal of impairment losses when

there is a change in economic conditions

Limited-life intangibles are amortized by systematic charges to expense over their useful lives.

true

Riley Co. incurred the following costs during 2018... Significant modification to the formulation of a chemical product: $160,000... Trouble-shooting in connection with breakdowns during commercial production: $150,000...Cost of exploration of new formulas: $200,000... Seasonal or other periodic design changes to existing products: $185,000... Laboratory research aimed at discovery of new technology: $355,000. In its income statement for the year ended December 31, 2018, Riley should report research and development expense of

$160,000 + $200,000 + $355,000 = $715,000-----answer

Lopez Corp. incurred $840,000 of research and development costs to develop a product for which a patent was granted on January 2, 2015. Legal fees and other costs associated with registration of the patent totaled $160,000. On March 31, 2018, Lopez paid $350,000 for legal fees in a successful defense of the patent. The total amount capitalized for the patent through March 31, 2018 should be

$160,000 + $350,000 = $510,000

On May 5, 2018, MacDougal Corp. exchanged 4,000 shares of its $25 par value treasury common stock for a patent owned by Masset Co. The treasury shares were acquired in 2017 for $90,000. At May 5, 2018, MacDougal's common stock was quoted at $36 per share, and the patent had a carrying value of $115,000 on Masset's books. MacDougal should record the patent at

$36*4000=$144,000, reason is, in case these shares are sold ny Masset's on the same date of acquistion, he would have earned the above said amount, hence the patent should be recorded at $144,000

Thompson Company incurred research and development costs of $100,000 and legal fees of $40,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Thompson record as Patent Amortization Expense in the first year?

$40,000 ÷ 10 = $4,000.

Ely Co. bought a patent from Baden Corp. on January 1, 2018, for $900,000. An independent consultant retained by Ely estimated that the remaining useful life at January 1, 2018 is 15 years. Its unamortized cost on Baden s accounting records was $450,000; the patent had been amortized for 5 years by Baden. How much should be amortized for the year ended December 31, 2018 by Ely Co.?

$900,000 ÷ 15 = $60,000.

On January 2, 2017, Klein Co. bought a trademark from Royce, Inc. for $2,000,000. An independent research company estimated that the remaining useful life of the trademark was 10 years. Its unamortized cost on Royce s books was $1,500,000. In Klein s 2017 income statement, what amount should be reported as amortization expense?

2,000,000/10 200,000

Parton owes $3 million that is due on February 28. The company borrows $2,400,000 on February 25 (5-year note) and uses the proceeds to pay down the $3 million note and uses other cash to pay the balance. How much of the $3 million note is classified as long-term in the December 31 financial statements?

2,400,000

On January 1, 2014, Russell Company purchased a copyright for $2,500,000, having an estimated useful life of 16 years. In January 2018, Russell paid $375,000 for legal fees in a successful defense of the copyright. Copyright amortization expense for the year ended December 31, 2018, should be...

2,500,000-(2,500,000/16)x4=1,875,000 (1,875,000+375,000)/12=187500

Alonzo Co. acquires 3 patents from Shaq Corp. for a total of $280,000. 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 values were: Patent AA: $20,000; Patent BB: $240,000; and Patent CC: $60,000. At what amount should Alonzo record Patent BB?

280,000 x (240,000/320,000)= 225,000

Dennis Company purchases Miles Company for $4,200,000 cash on January 1, 2018. The book value of Miles Company's net assets reported on its December 31, 2017 financial statement was $3,600,000. An analysis indicated that the fair value of Miles's tangible assets exceeded the book value by $600,000, and the fair value of identifiable intangible assets exceeded book value by $320,000. What amount of gain or goodwill is recognized by Dennis?

3,600,000+600,000+320,000-4,200,000=320,000

Contreras Corporation acquired a patent on May 1, 2017. Contreras paid cash of $35,000 to the seller. Legal fees of $1,500 were paid related to the acquisition. What amount should be debited to the patent account?

36,500 35,000+1500

During 2018, Leon Co. incurred the following costs... Testing in search for process alternatives: $380,000... Costs of marketing research for new product: $250,000... Modification of the formulation of a process: $560,000... Research and development services performed by Beck Corp. for Leon: $475,000. In Leon's 2018 income statement, research and development expense should be

380,000+560,000+475,000=1,415,000

January 2, 2015, Koll, Inc. purchased a patent for a new consumer product for $800,000. At the time of purchase, the patent was valid for 15 years; however, the patent s useful life was estimated to be only 10 years due to the competitive nature of the product. On December 31, 2018, the product was permanently withdrawn from the market under governmental order because of a potential health hazard in the product. What amount should Koll charge against income during 2018, assuming amortization is recorded at the end of each year?

800,000-[(800,000/10)x3]=560,000

Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the fair values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost of acquiring Easton. Easton will report the excess amount as

A gain

Which of the following costs of goodwill should be amortized over their estimated useful lives? a. Costs of goodwill from a business combination: No... Costs of developing goodwill internally: No b. Costs of goodwill from a business combination: No... Costs of developing goodwill internally: Yes c. Costs of goodwill from a business combination: Yes... Costs of developing goodwill internally: Yes d. Costs of goodwill from a business combination: Yes... Costs of developing goodwill internally: No

A. No, No

Which characteristic is not possessed by intangible assets? a. Physical existence. b. Long-lived. c. Result in future benefits. d. Expensed over current and/or future years.

A. Physical Existence

Operating losses incurred during the start-up years of a new business should be a. accounted for and reported like the operating losses of any other business. b. written off directly against retained earnings. c. capitalized as a deferred charge and amortized over five years. d. capitalized as an intangible asset and amortized over a period not to exceed 20 years.

Accounted for and reported like the operating losses of any other business

Which of the following would not be considered an R & D activity? a. Adaptation of an existing capability to a particular requirement or customer's need. b. Searching for applications of new research findings. c. Laboratory research aimed at discovery of new knowledge. d. Conceptual formulation and design of possible product or process alternatives.

Adaptation of an existing capability to a particular requirement or customer's need.

When a new company is acquired, which of these intangible assets, unrecorded on the acquired company s books, might be recorded in addition to goodwill? a. A brand name. b. A patent. c. A customer list. d. All of the above.

All of the Above

The cost of an intangible asset includes all of the following except a. purchase price. b. legal fees. c. other incidental expenses. d. all of these are included.

All of these are included

Which of the following is often reported as part of operating expenses? a. Loss on sale of patent. b. Impairment losses for intangible assets other than goodwill. c. Impairment losses on goodwill. d. Amortization expense.

Amortization Expense

Research and Development Costs a. are intangible assets. b. may result in the development of a patent. c. are easily identified with specific projects. d. all of the above

B may result in the development of patent

When the purchaser in a business combination pays less then the fair value of the identifiable net assets, such a situation is referred to as a: a. goodwill purchase. b. bargain purchase. c. residual purchase. d. blanket purchase.

Bargain purchase

The total amount of patent cost amortized to date is usually a. shown in a separate Accumulated Patent Amortization account which is shown contra to the Patent account. b. shown in the current income statement. c. reflected as credits in the Patent account. d. reflected as a contra property, plant and equipment item.

C reflected as credits in the patent account

The right granted to all authors, painters, musicians, sculptors, and other artists for their creations and expressions is termed as a a. copyright b. trademark c. patent d. franchise

Copy right

Which of the following is not reported under the Other Expenses and Losses section of the income statement? a. Goodwill impairment losses. b. Trade name amortization expense. c. Patent impairment losses d. None of the above.

D. None of the Above

Costs incurred internally to create intangibles are

Expensed as Incurred

Amortization of limited-life intangible assets should not be affected by expected residual values.

False

Contra accounts must be reported for intangible assets in a manner similar to accumulated depreciation and property, plant, and equipment.

False

Goodwill is considered a master valuation account because it measures the value of specifically identifiable intangible assets.

False

If fair value of an impaired asset recovers after an impairment has been recognized, the impairment may be reversed in a subsequent period

False

Internally generated intangible assets are initially recorded at fair value

False

Periodic alterations to existing products are an example of research and development costs.

False

Research and development costs are recorded as intangible assets if they will provide economic benefits in future years.

False

Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.

False

The rules used to account for impairments of limited-life intangible assets are different from the rules used to account for impairments of plant and equipment.

False

In a business combination, companies record identifiable intangible assets that they can reliably measure. All other intangible assets, too difficult to identify or measure, are recorded as

Goodwill

Which of the following intangible assets could not be sold by a business to raise needed cash for a capital project? a. Patent. b. Copyright. c. Goodwill. d. Brand Name.

Goodwill

Which of the following intangible assets should be shown as a separate item on the balance sheet? a. Goodwill b. Franchise c. Patent d. Trademark

Goodwill

Which of the following is not reported as part of continuing operations? a. Amortization expense. b. Impairment losses for intangible assets. c. Research and development costs. d. Goodwill.

Goodwill

Which of the following is not reported as part of continuing operations? a. Amortization expense. b. Impairment losses for intangible assets. c. Research and development costs. d. None of these answer choices are correct.

None of the answers are correct

Which of the following methods of amortization is normally used for intangible assets? a. Sum-of-the-years'-digits b. Straight-line c. Units of production d. Double-declining-balance

Straight Line

On February 10, 2018, after issuance of its financial statements for 2017, Higgins Company entered into a financing agreement with Cleveland Bank, allowing Higgins Company to borrow up to $8,000,000 at any time through 2020. Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of loan. Higgins Company presently has $3,000,000 of notes payable with Star National Bank maturing March 15, 2018. The company intends to borrow $5,000,000 under the agreement with Cleveland and liquidate the notes payable to Star National Bank. The agreement with Cleveland also requires Higgins to maintain a working capital level of $12,000,000 and prohibits the payment of dividends on common stock without prior approval by Cleveland Bank. From the above information only, the total short-term debt of Higgins Company as of the December 31, 2017 balance sheet date is...

The ability and intention to refinance the $3,000,000 that matures March 15, 2018 has not been established before 2017 balance sheet date and thus 3,000,000 is a current liability

Factors considered in determining an intangible asset s useful life include all of the following except -the amortization method used. -the expected use of the asset. -any legal or contractual provisions that may limit the useful life. -any provisions for renewal or extension of the asset's legal life.

The amortization method used

When a patent is amortized, the credit is usually made to a. the Patents account. b. an Accumulated Amortization account. c. a Deferred Credit account. d. an expense account.

The patents account

A company discloses gain contingencies in the notes only when a high probability exists for realizing them.

True

After an impairment loss is recorded for a limited-life intangible asset, the carrying amount becomes the basis for the impaired asset and is used to calculate amortization in future periods.

True

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

True

If a new patent is acquired through modification of an existing patent, the remaining book value of the original patent may be amortized over the life of the new patent.

True

If the fair value of an unlimited life intangible other than goodwill is less than its book value, an impairment loss must be recognized. True False

True

Limited-life intangibles are amortized by systematic charges to expense over their useful lives.

True

The cost of acquiring a customer list from another company is recorded as an intangible asset.

True

Intangible assets are reported on the balance sheet

True, only if they are acquired though

MaBelle Corporation incurred the following costs in 2018... Acquisition of R&D equipment with a useful life of 4 years in R&D projects: $800,000... 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: $600,000. What amount should MaBelle record as research & development expense in 2018?

a. $ 800,000 (800,000/4)+600,000

Which of the following is an example of a contingent liability? a. Obligations related to product warranties. b. Possible receipt from a litigation settlement. c. Pending court case with a probable favorable outcome. d. Tax loss carryforwards.

a. Obligations related to product warranties.

The following information is available for Barkley Company s patents... Cost: $3,440,000... Carrying amount: $1,920,000... Expected future net cash flows: $1,600,000... Fair value: $1,300,000. Barkley would record a loss on impairment of

b. $ 620,000. 1,920,000-1,300,000

A company acquires a patent for a drug with a remaining legal and useful life of six years on January 1, 2016 for $3,000,000. The company uses straight-line amortization for patents. On January 2, 2018, a new patent is received for a timed-release version of the same drug. The new patent has a legal and useful life of twenty years. The least amount of amortization that could be recorded in 2018 is

b. $100,000. 3,000,000-[(3,000,000/6) x 2]=2,000,000 2,000,000/20=100,000

ELO Corporation purchased a patent for $135,000 on September 1, 2016. It had a useful life of 10 years. On January 1, 2018, ELO spent $33,000 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2018?

b. $30,000. 135,000-[(135,000/10)X(4/3)=117,000 (117,000+33,000)/5=30,000

Dennis Company purchases Miles Company for $5,000,000 cash on January 1, 2018. The book value of Miles Company's net assets reported on its December 31, 2017 financial statement was $3,600,000. An analysis indicated that the fair value of Miles's tangible assets exceeded the book value by $600,000, and the fair value of identifiable intangible assets exceeded book value by $320,000. Determine the fair value of identifiable net assets used to record goodwill a. $280,000. b. $4,520,000. c. $4,200,000. d. $3,600,000

b. $4,520,000. 3,600,000+600,000+320,000=4,520,000

In January, 2013, Findley Corporation purchased a patent for a new consumer product for $960,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2018 the product was determined to be obsolete due to a competitors new product. What amount should Findley charge to expense during 2018, assuming amortization is recorded at the end of each year? a. $640,000. b. $480,000. c. $96,000. d. $64,000.

b. $480,000. (960,000/10) X 5

Jenks Corporation acquired Linebrink Products on January 1, 2018 for $8,000,000, and recorded goodwill of $1,700,000 as a result of that purchase. At December 31, 2018, Linebrink Products had a fair value of $6,800,000. The net identifiable assets of the Linebrink (excluding goodwill) had a fair value of $5,800,000 at that time. What amount of loss on impairment of goodwill should Jenks record in 2018?

b. $700,000 6,800,000-5,800,000=1,000,000 1,700,000-1,000,000=700,000

Day Company purchased a patent on January 1, 2017 for $640,000. The patent had a remaining useful life of 10 years at that date. In January of 2018, Day successfully defends the patent at a cost of $288,000, extending the patent s life to 12/31/29. What amount of amortization expense would Day record in 2018?

b. $72,000 [(640,000-64,000)+288,000)]/12

Danks Corporation purchased a patent for $405,000 on September 1, 2016. It had a useful life of 10 years. On January 1, 2018, Danks spent $99,000 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 2018?

b. $90,000. 405,000-[(405,000/10)x(4/3)=351,000 (351,000+99,000)/5=90,000

Which of the following types of intangible assets result from interactions and relationships with outside parties? a. Marketing-related intangible assets b. Customer-related intangible assets c. Contract-related intangible assets d. Artistic-related intangible assets

b. Customer-related intangible assets

A company buys an oil rig for $5,000,000 on January 1, 2018. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $1,000,000 (present value at 10% is $385,550). 10% is an appropriate interest rate for this company. What expense should be recorded for 2018 as a result of these events?

b. Depreciation expense of $500,000 and interest expense of $38,555

Which intangible assets are amortized? a. Limited-Life: Yes... Indefinite-Life: Yes b. Limited-Life: Yes... Indefinite-Life: No c. Limited-Life: No... Indefinite-Life: Yes d. Limited-Life: No... Indefinite-Life: No

b. Limited-Life: Yes... Indefinite-Life: No

During 2018, Bond Company purchased the net assets of May Corporation for $2,200,000. The fair value of the net assets is $3,000,000. On the date of the transaction, May had $600,000 of liabilities. The fair value of May's assets when acquired were as follows...Current assets: $1,080,000... Noncurrent assets: $2,520,000. How should the $800,000 difference between the fair value of the net assets acquired ($3,000,000) and the purchase price ($2,200,000) be accounted for by Bond?

b. The $800,000 difference should be recognized as a gain. 3,000,000-2,200,000=800,000 gain

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as a. research and development expense in the period(s) of construction. b. depreciation deducted as part of research and development costs. c. depreciation or immediate write-off depending on company policy. d. an expense at such time as productive research and development has been obtained from the facility.

b. depreciation deducted as part of research and development costs.

To record an asset retirement obligation (ARO), the cost associated with the ARO is a. expensed. b. included in the carrying amount of the related long-lived asset. c. included in a separate account. d. capitalized over the asset's useful life.

b. included in the carrying amount of the related long-lived asset.

Goodwill a. represents the purchase price of a business that is about to be sold. b. is the difference between the fair value of the net tangible and identifiable intangible assets and the purchase price of the acquired business. c. generated internally should be capitalized in the year it occurs. d. is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value.

b. is the difference between the fair value of the net tangible and identifiable intangible assets and the purchase price of the acquired business.

Goodwill may be recorded when: a. it is identified within a company. b. one company acquires another in a business combination. c. the fair value of a company's assets exceeds their cost. d. a company has exceptional customer relations.

b. one company acquires another in a business combination

Jeff Corporation purchased a limited-life intangible asset for $375,000 on May 1, 2016. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2018? a. $ -0- b. $75,000 c. $100,000 d. $112,500

c. $100,000 (375,000/10)X(8/3)

Mini Corp. acquires a patent from Maxi Co. in exchange for 2,500 shares of Mini Corp. s $5 par value common stock and $90,000 cash. When the patent was initially issued to Maxi Co., Mini Corp. s stock was selling at $7.50 per share. When Mini Corp. acquired the patent, its stock was selling for $9 a share. Mini Corp. should record the patent at what amount?

c. $112,500 (2,500x$9)+90,000

Rich Corporation purchased a limited-life intangible asset for $450,000 on May 1, 2016. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2018?

c. $120,000 (450,000/10)X(8/3)

Blue Sky Company s 12/31/18 balance sheet reports assets of $7,000,000 and liabilities of $2,800,000. All of Blue Sky s assets book values approximate their fair value, except for land, which has a fair value that is $420,000 greater than its book value. On 12/31/18, Horace Wimp Corporation paid $7,140,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?

c. $2,520,000 (7,000,000+420,000)-2,800,000=4,620,000 7,140,000-4,620,000=2,520,000

Platteville Corporation has the following account balances at 12/31/18... Amortization expense: $20,000... Goodwill: $280,000... Patent(net of $60,000 amortization) : $160,000. What amount should Platteville report for intangible assets on the 12/31/18 balance sheet?

c. $440,000 280,000+160,000=440,000

Harrel Company acquired a patent on an oil extraction technique on January 1, 2017 for $7,500,000. It was expected to have a 10 year life and no residual value. Harrel uses straight-line amortization for patents. On December 31, 2018, the future cash flows expected from the patent were $900,000 per year for the next eight years. The present value of these cash flows, discounted at Harrel s market interest rate, is $4,200,000. At what amount should the patent be carried on the December 31, 2018 balance sheet?

c. $6,000,000 7,500,000-[(7,500,000/10)x2)

Loazia Inc. incurred the following costs during the year ended December 31, 2018... Laboratory research aimed at discovery of new knowledge: $270,000... Costs of testing prototype and design modifications: $75,000... Quality control during commercial production, including routine testing of products: $270,000... Construction of research facilities having an estimated useful life of 6 years but no alternative future use: $360,000. The total amount to be classified and expensed as research and development in 2018 is

c. $705,000. 270,000+75,000+360,000

Which of the following costs should be excluded from research and development expense? a. Modification of the design of a product b. Acquisition of R & D equipment for use on a current project only c. Cost of marketing research for a new product d. Engineering activity required to advance the design of a product to the manufacturing stage

c. Cost of marketing research for a new product

Which of the following legal fees should be capitalized? a. Legal fees to obtain a copyright: No... Legal fees to successfully defend a trademark: No b. Legal fees to obtain a copyright: No... Legal fees to successfully defend a trademark: Yes c. Legal fees to obtain a copyright: Yes... Legal fees to successfully defend a trademark: Yes d. Legal fees to obtain a copyright: Yes... Legal fees to successfully defend a trademark: No

c. Legal fees to obtain a copyright: Yes... Legal fees to successfully defend a trademark: Yes

Buerhle Company needs to determine if its indefinite-life intangibles other than goodwill have been impaired and should be reduced or written off on its balance sheet. The impairment test(s) to be used is (are)... a. Recoverability Test: Yes... Fair Value Test: Yes b. Recoverability Test: Yes... Fair Value Test: No c. Recoverability Test: No... Fair Value Test: Yes d. Recoverability Test: No... Fair Value Test: No

c. Recoverability Test: No... Fair Value Test: Yes

The intangible asset goodwill may be

capitalized only when purchased.

A loss on impairment of an intangible asset is the difference between the asset s

carrying amount and its fair value.

John Thomas has recently entered into an agreement with Longman Inc. Under this agreement, John will sell its products using the trade name of Longman in a specified geographical location. What type of intangible asset is this agreement between John Thomas and Longman Inc.? a. contract-related intangible assets b. artistic-related intangible assets c. marketing-related intangible assets d. customer-related intangible assets

contract-related intangible assets

Lynne Corporation acquired a patent on May 1, 2017. Lynne paid cash of $90,000 to the seller. Legal fees of $2,000 were paid related to the acquisition. What amount should be debited to the patent account?

d. $92,000 90,000+2,000

Which of the following research and development expenditures should be capitalized and depreciated? a. Engineering costs incurred to advance the new product to a production stage b. Cost of marketing research to promote a new product c. Material, labor, and overhead costs incurred in developing a new product d. Acquisition of machinery that can also be used for future R&D projects

d. Acquisition of machinery that can also be used for future R&D projects

Which of the following is not considered research and development costs? a. Planned search or critical investigation aimed at discovery of new knowledge. b. Translation of research findings or other knowledge into a plan or design for a new product or process. c. Translation of research findings or other knowledge into a significant improvement of an existing product. d. Cost of marketing research to promote a new product

d. Cost of marketing research to promote a new product.

Which of the following is not reported under the Other Expenses and Losses section of the income statement? a. Goodwill impairment losses. b. Loss on sale of patent. c. Patent impairment losses. d. Trade name amortization expense.

d. Trade name amortization expense.

The cost of successfully defending a patent suit should be a. charged off in the current period. b. amortized over the legal life of the purchased patent. c. added to factory overhead and allocated to production of the product. d. amortized over the remaining estimated useful life of the patent.

d. amortized over the remaining estimated useful life of the patent.

The costs of organizing a corporation include legal fees, fees paid to the state of incorporation, fees paid to promoters, and the costs of meetings for organizing the promoters. These costs are said to benefit the corporation for the entity's entire life. These costs should be

d. expensed as incurred.

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 a. patents and amortized over the legal life of the patent. b. legal fees and amortized over 5 years or less. c. expenses of the period. d. patents and amortized over the remaining useful life of the patent.

d. patents and amortized over the remaining useful life of the patent.