25. In accounting, goodwil a. Is neve b. May be recorded when a company's level of net income exceeds the industry r recorded. average c. Must be expensed in the period when it is acquired. d. May be recorded when the company 26. The balance sheet of Cattleman's Steakhouse shows assets of $86,40 purchases another business. d iabilities fair value of its liabilities of $15,000. The fair value of the assets is $90,000 and the onghorn paid Cattleman's $95,000 to acquire it. Longhorn should record goodwill on this purchase of a. $3,600 b. $5,000 c. $20,000 d. $23,600 27. Which of the following subsequent expenditures would not be capitalized? a. Ordinary repairs and maintenance. b. Additions. C. Improvements d. Legal defense of intangible assets 28. The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as: a. Goodwill b. An addition in the Buildings account. c. An expense in the period incurred. d. A patent 29. The factors used to compute depreciation expense are an asset's: a. Cost, residual value, and physical life. b. Cost, residual value, and service life c. Fair market value, residual value, and economic life. d. Cost, replacement value, and service life. equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. 30. Kansas Enterprises purchased equipment for $60,000 on January 1, 2018. The Using the straight-line method, depreciation expense for 2018 would be: a. $12,000 b. $11,000 C. $60,000 d. None of these. A machine has a cost of $15,000, an estimated residual value of $3,000, and an estimated useful life of four years. The machine is being depreciated on a straight- ine basis. At the end of the second year, what amount will be reported for ccumulated depreciation? a. $9,000 b. $6,000 c. $7,500 d. $3,000