ABC Corp. acquires a patent from XYZ Co

$.$

$$in exchange for

$2$

$,$

$5$

$0$

$0$

$$shares of ABC Corp.

$$

s $

$5$

$$par value ordinary shares and $

$8$

$0$

$,$

$0$

$0$

$0$

$$cash$.$ When the patent was initially issued to XYZ Co

$.$

$,$

$$ABC Corp.

$$

s shares were selling at $

$7$

$.$

$5$

$0$

$$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

$9$

$7$

$,$

$5$

$0$

$0$

$9$

$2$

$,$

$5$

$0$

$0$

$1$

$0$

$3$

$,$

$5$

$0$

$0$

$8$

$5$

$,$

$0$

$0$

$0$

$*$

SAM Corporation purchased a limited

$-$

life intangible asset for $

$1$

$5$

$0$

$,$

$0$

$0$

$0$

$$on May

$1$

$,$

$2$

$0$

$1$

$4$

$.$

$$It has a useful life of

$1$

$0$

$$years$.$ What total amount of amortization expense should have been recorded on the intangible asset by December

$3$

$1$

$,$

$2$

$0$

$1$

$5$

$?$

$1$

$$point

$2$

$5$

$,$

$0$

$0$

$0$

$3$

$0$

$,$

$0$

$0$

$0$

$4$

$0$

$,$

$0$

$0$

$0$

$4$

$5$

$,$

$0$

$0$

$0$

$*$

IBM Company incurred research and development costs of $

$1$

$0$

$0$

$,$

$0$

$0$

$0$

$$and legal fees of $

$5$

$0$

$,$

$0$

$0$

$0$

$$to acquire a patent. The patent has a legal life of

$2$

$0$

$$years and a useful life of

$5$

$$years$.$ What amount should IBM record as Patent Amortization Expense in the first year

$1$

$$point

$1$

$0$

$,$

$0$

$0$

$0$

$5$

$,$

$0$

$0$

$0$

$7$

$,$

$5$

$0$

$0$

$1$

$5$

$,$

$0$

$0$

$0$

$*$

ABC Company purchases XYZ Company for $

$8$

$4$

$0$

$,$

$0$

$0$

$0$

$$cash on January

$1$

$,$

$2$

$0$

$1$

$6$

$.$

$$The book value of XYZ Company

$$

s net assets, as reflected on its December

$3$

$1$

$,$

$2$

$0$

$1$

$5$

$$statement of financial position is $

$6$

$2$

$0$

$,$

$0$

$0$

$0$

$.$

$$An analysis by ABC on December

$3$

$1$

$,$

$2$

$0$

$1$

$5$

$$indicates that the fair value of XYZ

$$

s tangible assets exceeded the book value by $

$6$

$0$

$,$

$0$

$0$

$0$

$,$

$$and the fair value of identifiable intangible assets exceeded book value by $

$4$

$5$

$,$

$0$

$0$

$0$

$.$

$$How much goodwill should be recognized by ABC Company when recording the purchase of XYZ Company?

$1$

$$point

$1$

$6$

$0$

$,$

$0$

$0$

$0$

$2$

$2$

$0$

$,$

$0$

$0$

$0$

$1$

$1$

$5$

$,$

$0$

$0$

$0$

$0$

$*$

In generating a patent ABC incurred the following costs

Research cost: $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$,$

$$legal fees associated with registration of the patent: $

$5$

$0$

$,$

$0$

$0$

$0$

$,$

$$and legal fees in a successful defense of the patent: $

$1$

$4$

$0$

$,$

$0$

$0$

$0$

$.$

$$The total amount capitalized for the patent should be

$1$

$$point

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$6$

$9$

$0$

$,$

$0$

$0$

$0$

$1$

$9$

$0$

$,$

$0$

$0$

$0$

$5$

$0$

$,$

$0$

$0$

$0$

$*$

On January

$1$

$,$

$2$

$0$

$1$

$1$

$,$

$$Russell Company purchased a copyright for $

$1$

$,$

$2$

$0$

$0$

$,$

$0$

$0$

$0$

$,$

$$having an estimated useful life of

$1$

$6$

$$years$.$ In January

$2$

$0$

$1$

$5$

$,$

$$Russell paid $

$1$

$2$

$0$

$,$

$0$

$0$

$0$

$$for legal fees in a successful defense of the copyright. Copyright amortization expense for the year ended December

$3$

$1$

$,$

$2$

$0$

$1$

$5$

$,$

$$should be

$1$

$$point

$9$

$0$

$,$

$0$

$0$

$0$

$8$

$5$

$,$

$0$

$0$

$0$

$7$

$5$

$,$

$0$

$0$

$0$

$9$

$5$

$,$

$0$

$0$

$0$

$*$

Purchase Retailer made cash sales during the month of October of $

$1$

$2$

$7$

$,$

$2$

$0$

$0$

$$including sales tax. The sales are subject to a

$6$

$\%$

$$sales tax. how much the company will report a sales tax payable?

$1$

$$point

$7$

$,$

$6$

$3$

$2$

$7$

$,$

$2$

$0$

$0$

$4$

$7$

$,$

$7$

$0$

$0$

$*$

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

$4$

$0$

$\%$

$$chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

$$the company should record a litigation expense and a liability of $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

$$

$1$

$$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

$*$