ACCT 551 Week 4 Midterm (Version 3)

Multiple Choice

1. Question : (TCO C) The major problem of accounting for intangibles is determining
2. Question : (TCO C) Which of the following is not an intangible asset?
3. Question : (TCO C) A loss on impairment of an intangible asset is the difference between the asset’s
4. Question : (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had a useful life of 10 years. On January 1, 2010, ELO spent $22,000 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 2010?
5. Question : (TCO C) General Products Company bought Special Products Division in 2010 and appropriately recorded $500,000 of goodwill related to the purchase. On December 31, 2011, the fair value of Special Products Division is $4,000,000 and it is carried on General Products’ books for a total of $3,400,000, including the goodwill. An analysis of Special Products Division’s assets indicates that goodwill of $400,000 exists on December 31, 2011. What goodwill impairment should be recognized by General Products in 2011?
6. Question : (TCO D) An employee’s net (or take-home) pay is determined by gross earnings minus amounts for income tax withholdings and the employee’s
7. Question : (TCO D) Which of the following taxes does not represent a payroll deduction a company may incur?
8. Question : (TCO D) Which of the following is not acceptable treatment for the presentation of current liabilities?
9. Question : (TCO D) On December 31, 2010, Irey Co. has $2,000,000 of short-term notes payable due on February 14, 2011………… Bank and used $500,000 additional cash to liquidate $1,700,000 of the short-term notes payable………. on March 5, 2011 is
10. Question : (TCO D) CalCount pays a weekly payroll of $85,000 that includes federal taxes withheld of $12,700, FICA taxes withheld of $7,890, and 401(k) withholdings of $9,000. What is the effect of assets and liabilities from this transaction?
11. Question : (TCO D) Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity 10 years from date of issue……….
12. Question : (TCO D) Theoretically, the costs of issuing bonds could be
13. Question : (TCO D) Feller Company issues $20,000,000 of 10-year, 9% bonds on March 1, 2010 at 97 plus accrued interest……. on the issue date?
14. Question : (TCO D) A company issues $5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010. …………. The proceeds from the bonds are $4,901,036. Using effective-interest amortization, how much interest expense will be recognized in 2010?
15. Question : (TCO D) Clothes Horse Corp. (“CHC”) issued $500,000 bonds due in 10 years on January 1, Year 1 at a premium for $567,105…………What amount of gain should CHC record related to the redemption?
    

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Explanatroy

1. Question (TCO C) Presented below is information related to copyrights owned by Wamser Corporation at December 31, 2009.
2. Question : (TCO C) Recently, a group of university students decided to incorporate for the purposes of selling a process to recycle the waste product from manufacturing cheese……… One student wishes to charge these costs against revenue in the current period. Another student wishes to defer these costs and amortize them in the future. Which student is correct and why?
3. Question : (TCO D) Edwards Co. includes one coupon in each bag of dog food it sells. In return for four coupons, customers receive a dog toy that the company purchases for $1.20 each………..16,000 toys were purchased, and 60,000 coupons were redeemed.
4. Question : (TCO D) Grider Industries, Inc. issued $6,000,000 of 8% debentures on May 1, 2010 and received cash totaling $5,323,577. The bonds pay interest semiannually on May 1 and November 1. The maturity date on the bonds is November 1, 2018. The firm uses the effective-interest method of amortizing discounts and premiums……. interest rate of 10%.
5. Question : (TCO D) Mann, Inc., which owes Doran Co. $600,000 in notes payable with accrued interest of $54,000, is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $570,000, an original cost of $840,000, and accumulated depreciation of $195,000. Instructions: