1.

Glassrod Corp. purchased Sledghammers, Inc., and recognized goodwill on the acquisition date. Glassrod made additional outlays during the year just ended to enhance this goodwill. Over how many years should Glassrod amortize these additional costs?

a.0

b.10

c.20

d.40

2.

In one of a companys reporting units, both an asset group and the goodwill are being tested for impairment. Which of the following statements is correct regarding impairment testing and impairment losses?

a.The other asset group should be tested for an impairment loss before goodwill is tested.

b.Impairment testing may be conducted concurrently for the other asset group and goodwill.

c.If the other asset group is impaired, the loss should not be recognized prior to goodwill being tested for impairment.

d.If goodwill is impaired, the loss should be recognized prior to testing the other assets for impairment.

3.

Which of the following is a research and development cost?

a.Development or improvement of techniques and processes.

b.Offshore oil exploration that is the primary activity of a company.

c.Research and development performed under contract for others.

d.Market research related to a major product for the company.

4.

Which of the following items would be classified as a research and development cost?

a.Periodic design changes to an existing product.

b.Engineering follow-up in an early phase of commercial production.

c.Testing in search of product or process alternatives.

d.Legal work in connection with a patent application