Question :
81. The Llama Company spent $300,000 research and development during Year : 1245646
81. The Llama Company spent $300,000 on research and development during Year 8 to generate new product lines. One of the three projects resulted in a successful patented product while the other two projects resulted in unsuccessful efforts. How much of the $300,000 should be recognized as an expense in Year 8?
A. $300,000
B. $200,000
C. $150,000
D. $100,000
E. $0
82. Montana Company reports its net assets at a book value of $150,000. Recent investigation revealed that the net assets had a market value of $175,000. In addition, Montana had been offered $220,000 for the net assets by a company named Supply.Com. What is the amount of goodwill that should be recorded by Montana Co.?
A. $0
B. $45,000
C. $25,000
D. $70,000
E. $220,000
83. U.S. GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses. The first category addresses long-lived assets except intangible assets not subject to amortization and goodwill. This category does not include:
A. property, plant, and equipment.
B. patents.
C. franchise rights.
D. land.
E. brand names and trademarks.
84. Firms with high proportions of intangibles, whether recognized as assets on the balance sheet or not, tend to rely more on
A. equity financing than on long-term debt financing.
B. long-term debt financing than on equity financing.
C. short-term debt financing than on long-term debt financing.
D. long-term debt financing than on short-term debt financing.
E. None of these answer choices is correct.
85. Intangible assets make up 40 percent of the total assets of a particular firm. This firm is most likely to be:
A. a pharmaceutical firm that invests in internal research and development to create new drugs.
B. a consumer products company that invests in advertising to create brand recognition.
C. an information processing company that develops computer software to use in its business.
D. a restaurant business that has grown by acquiring other restaurant chains.
E. All of these answer choices are correct.
86. U.S. GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses. The second category addresses intangibles, other than goodwill, not subject to amortization. This category does not include:
A. brand names.
B. trademarks.
C. franchise rights.
D. renewable licenses.
E. none of the above
87. In accounting, depreciation and amortization involve a systematic process of
A. cost allocation.
B. valuation.
C. recognizing holding gains.
D. sum-of-the-years’-digits.
E. declining balances.
88. Depreciation and amortization expenses appear in the income statement, and are sometimes
A. disclosed separately.
B. included in selling and administrative expenses.
C. included as part of cost of goods sold expense.
D. all of the above
E. none of the above
89. The financial statements and notes provide information for analyzing changes in property, plant, and equipment. What ratio(s) is/are used by analysts?
A. Fixed Asset Turnover
B. Proportion of Depreciable Assets
C. Average Age of Depreciable Assets
D. all of the above
E. none of the above
90. First Third Company depreciates an asset with a cost of $55,000 over 10 years using the straight-line method of depreciation and the yearly depreciation expense is $4,000, what is the estimated salvage value of the asset?
A. $5,000
B. $10,000
C. $15,000
D. $20,000
E. $20,375
