Question : 45.              Safeco, Inc. owns a jet airplane with an original : 1370097

45.              Safeco, Inc. owns a jet airplane with an original cost of $958,500 and accumulated depreciation of $644,800. The company exchanged the airplane for 50,000 shares of stock held by another company as an investment. The stock is valued at $7 per share. The gain or loss recognized on the exchange would be:

A)$294,800 loss

B)$313,700 gain

C)$ 36,300 gain

D)no gain or loss should be recognized

46.              Manhattan Corporation owns a jet airplane with an original cost of $958,500 and accumulated depreciation of $644,800. The company exchanged the airplane for 50,000 shares of stock held by another company as an investment. The stock is valued at $5 per share. The gain or loss recognized on the exchange would be:

A)$394,800 loss

B)$ 63,700 loss

C)$313,700 gain

D)no gain or loss should be recognized

47.              Laguna Enterprises is trading in its old schooner for a new model. The old schooner is on the books at a cost of $535,000 with accumulated depreciation of $384,300. The new schooner has a list price of $765,000 but the manufacturer has agreed to reduce this by $125,000 in return for Laguna’s old schooner. The new schooner should be recorded on the books at a cost of:

A)$640,000

B)$739,300

C)$765,000

D)$790,700

48.When an exchange is deemed to have no economic substance, the gain is not recognized and is subtracted from which of the following to determine the cost of the new asset.

A)  The book value of the asset given

B)   The book value of the asset received

C)   The cash given

D)   The fair value of the asset received

49.              Operational investments in non-renewable assets are referred to as:

A)plant assets

B)intangible assets

C)natural resources

D)long-term investments

50.              The legal life of a patent is:

A)5 years

B)7 years

C)17 years

D)40 years

51.              The intangible asset representing the difference between the purchase price paid for a going concern and the fair market value of the purchased company’s identifiable net assets is referred to as:

A)a patent

B)goodwill

C)a franchise

D)a leasehold

52.              Offshore Oil Company owns oil reserves estimated to contain 6,500,000 barrels of oil. The oil reserves originally cost $75,000,000 with an estimated salvage value of $3,500,000. During the current period, 1,200,000 barrels of oil were extracted. The depletion rate per barrel was:

A)$11.00

B)$11.54

C)$59.58

D)$62.50

Use the following to answer questions 53-54:

Oceanside Enterprises is trading in its old fishing vessel for a new model. The old fishing vessel is on the books at a cost of $364,000 with accumulated depreciation of $314,600. The new fishing vessel has a list price of $538,000 but the manufacturer has agreed to reduce this by $75,000 in return for Oceanside’s old fishing vessel.

53.              The gain or loss recognized on the exchange would be:

A)$49,400 loss

B)$25,600 gain

C)$75,000 gain

D)no gain or loss should be recognized

54.              The new fishing vessel should be recorded on the books at a cost of:

A)$538,000

B)$512,400

C)$463,000

D)$488,600