1. Bissette Inc. pays $3,500,000 to purchase Bristol Corp. The following information regarding Bristol Corp. is available at the time of purchase:

• The book value of Bristols identifiable net assets is $4,000,000
• The fair value of Bristols identifiable net assets is $4,200,000

In Bissettes entry to record the purchase of Bristol Corp., which of the following statements is true?

1. Goodwill of $700,000 should be recorded.
2. Goodwill of $500,000 should be recorded.
3. Goodwill of $200,000 should be recorded.
4. A gain of $500,000 should be recorded.
5. A loss of $500,000 should be recorded.
6. A gain of $700,000 should be recorded.
7. A loss of $700,000 should be recorded.

2. On November 1, 2021, Green Corp., a calendar year-end company, purchased materials costing $300,000 for use in a variety of future R&D activities. As of December 31, 2021, materials costing $75,000 remain unused. There was no beginning balance in the R&D Materials Inventory account.

Assuming the R&D Materials Inventory account was debited at the time of their purchase, the journal entry Green records on 12/31/21 should be which of the following:

A.	Cost of Goods Sold	75,000
	R&D Materials Inventory		75,000
B.	Cost of Goods Sold	225,000
	R&D Materials Inventory		225,000
C.	R&D Expense	225,000
	R&D Materials Inventory		225,000
D.	R&D Expense	75,000
	R&D Materials Inventory		75,000
E.	Amortization Expense	75,000
	R&D Materials Inventory		75,000
F.	Materials (or Supplies) Expense	225,000
	R&D Materials Inventory		225,000

3. Which of the following choices shows the correct effect on the income statement and balance sheet equation when a company records an impairment loss on an intangible asset?

	Net Income		Assets		Liabilities		Owners Equity
A.	No effect		No effect		Increase		Decrease
B.	Decrease		Decrease		No effect		Decrease
C.	No effect		Decrease		No effect		Decrease
D.	Decrease		Decrease		Decrease		No effect
E.	Decrease		No effect		Increase		Decrease