QUESTION 29

On july 1, 2001, waters kennels sells equipment for $22,000. the equipment originally cost $60,000, had an estimated 5 year life and an expected salvage value of $10,000. the accumulated depreciation account had a balance of $35,000 on January 1, 2001, using the straight-line method, after adding six more months of depreciation. the gain or loss on disposal is

	a.	$3,000 gain
	b.	$2,000 loss
	c.	$3,000 loss
	d.	$2,000 gain

3 points

QUESTION 30

A plant asset with a cost of $30,000 and accumulated depreciation of $27,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the plant asset?

	a.	$2,500 loss
	b.	$1,000 loss
	c.	$1,000 gain
	d.	$2,500 gain

3 points

QUESTION 31

On july 1, 2000, Marlin Company purchased the copyright to Bodine computer tutorials for $81,000. It is estiamted that the copyright will have a usefull life of 5 years with an estimated salvage value of $6,000. The amount of amortization expense recognized for the year 2000 would be

	a.	$16,200
	b.	$7,500
	c.	$15,000
	d.	$8,100

3 points

QUESTION 32

Which of the following is not considered an intangible asset?

	a.	goodwill
	b.	an oil well
	c.	a franchise
	d.	a patent

3 points

QUESTION 33

The amortization period for an intangible asset cannot exceed

	a.	60 years
	b.	10 years
	c.	40 years
	d.	75 years

3 points

QUESTION 34

Cost allocation of an intangible asset is reffered to as

	a.	amortization
	b.	depreciation
	c.	accretion
	d.	capitalization

3 points

QUESTION 35

Research and development costs

	a.	are classified as intangible assets
	b.	must be expensed when incurred under generally accepted accounting principles
	c.	should be included in the cost of the patent they relate to
	d.	are capitalized and then amortized over a period not to exceed 40 years