Dawson Company paid $451,250 to acquire Good Company. In the negotiations it was agreed that a 5% return on net assets was normal for the industry. Good's fair market value of net assets was $420,000 and excess earnings would be capitalized at 8%. What is Dawson's increase in expected annual net income form the Good Company acquisition?

The cost of purchasing patent rights for a product that might otherwise have competed with one of the purchaser's patented products should be:

A)Amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product.

B)Amortized over the legal life of the purchased patent.

C)Charged off in the current period

D)Added to factory overhead and allocated to production of the purchaser's product

Which of the following research and development related costs should be capitalized and depreciated over current and future periods?

A)Inventory used for a specific research project

B)Administrative salaries allocated to research and development

C)Research and development general laboratory building which can be put to alternative uses in the future

D)Research findings purchased from another company to aid a particular research project currently in process