ABC Corp. acquires a patent from XYZ Co$.$ in exchange for $2,500$ shares of ABC Corp.$$s $$5$ par value ordinary shares and $$80,000$ cash. When the patent was initially issued to XYZ Co$.,$ ABC Corp.$$s shares were selling at $$7\mathrm{.}50$ per share. When ABC Corp. acquired the patent, its shares were selling for $$9$ a share. ABC Corp. should record the patent at what amount?

$1$ point

$97,500$

$92,500$

$103,500$

$85,000$

$*$

SAM Corporation purchased a limited$-$life intangible asset for $$150,000$ on May $1,2014.$ It has a useful life of $10$ years. What total amount of amortization expense should have been recorded on the intangible asset by December $31,2015?$

$1$ point

$25,000$

$30,000$

$40,000$

$45,000$

$*$

IBM Company incurred research and development costs of $$100,000$ and legal fees of $$50,000$ to acquire a patent. The patent has a legal life of $20$ years and a useful life of $5$ years. What amount should IBM record as Patent Amortization Expense in the first year

$1$ point

$10,000$

$5,000$

$7,500$

$15,000$

$*$

ABC Company purchases XYZ Company for $$840,000$ cash on January $1,2016.$ The book value of XYZ Company$$s net assets, as reflected on its December $31,2015$ statement of financial position is $$620,000.$ An analysis by ABC on December $31,2015$ indicates that the fair value of XYZ$$s tangible assets exceeded the book value by $$60,000,$ and the fair value of identifiable intangible assets exceeded book value by $$45,000.$ How much goodwill should be recognized by ABC Company when recording the purchase of XYZ Company?

$1$ point

$160,000$

$220,000$

$115,000$

$0$

$*$

In generating a patent ABC incurred the following costs

Research cost: $$500,000,$ legal fees associated with registration of the patent: $$50,000,$ and legal fees in a successful defense of the patent: $$140,000.$ The total amount capitalized for the patent should be

$1$ point

$500,000$

$690,000$

$190,000$

$50,000$

$*$

On January $1,2011,$ Russell Company purchased a copyright for $$1,200,000,$ having an estimated useful life of $16$ years. In January $2015,$ Russell paid $$120,000$ for legal fees in a successful defense of the copyright. Copyright amortization expense for the year ended December $31,2015,$ should be

$1$ point

$90,000$

$85,000$

$75,000$

$95,000$

$*$

Purchase Retailer made cash sales during the month of October of $$127,200$ including sales tax. The sales are subject to a $6\%$ sales tax. how much the company will report a sales tax payable?

$1$ point

$7,632$

$7,200$

$47,700$

$*$

Which of the following terms is associated with recognizing a provision?

$1$ point

possible

probable

likely

remote

$*$

PPU Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a $40\%$ chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $$500,000.$ the company should record a litigation expense and a liability of $$500,000.$

$1$ point

True

False

$*$

Short$-$term debt obligations are classified as current liabilities unless an agreement to refinance is completed before the financial statements are issued.

$1$ point

True

False

$*$

Provisions are only recorded if it is possible that the company will have to settle an obligation at some point in the future.

$1$ point

True

False

$*$

Internally generated goodwill should not be capitalized in the accounts

$1$ point

True

False

$*$

Research and development costs are recorded as an intangible asset if it will provide economic benefits in future years

$1$ point

True

False

$*$

The impairment test for goodwill is conducted based on the cash$-$generating unit to which the goodwill has been assigned

$1$ point

True

FalseThe impairment test for goodwill is conducted based on the cash$-$generating unit to which the goodwill has been assigned

$1$ point

True

FalseThe impairment test for goodwill is conducted based on the cash$-$generating unit to which the goodwill has been assigned

$1$ point

True

False$*$