Question: A company acquired mineral rights for $10,000,000 which are estimated at 80,000 tons. During the year 15,000 tons were extracted and sold. How much depletion should be recorded for the year?

Select one:

$5,000,000

$1,875,000

$3,750,000

$2,500,000

Question: Research and development costs are __________.

Select one:

Added to the cost of patents

Capitalized under intangible assets

Charged to operating expenses

Charged to operating expenses only if there is no future benefit

Question: Goodwill is equal to the excess of purchase price of an acquired company over the total __________.

Select one:

Book value of its assets

Book value of its net assets

Market value of its assets

Market value of its net assets

Question: If goodwill is impaired, the write down will __________.

Select one:

Decrease net income, assets and owners' equity

Decrease net income and assets and have no effect on owners' equity

Decrease net income and increase assets and owner's equity

Decrease net income and assets, but increase owners' equity

Question: ntangible assets are used in operations but __________.

Select one:

Cannot be specifically identified

Cannot be sold

Lack physical substance

Cannot be long-lived

Question: The cost of a patent should be amortized over __________.

Select one:

20 years

Economic life

20 years or economic life whichever is shorter

Only amortized if an impairment occurs

Question:

A patent was purchased for $670,000 with a legal life of 20 years. Management estimates that the patent has an 8 year economic life. The entry to record amortization would include __________.

Select one:

An increase in amortization expense for $33,500

An increase in research and development expense for $670,000

A decrease in patent for $83,750

An increase in accumulated amortization for $670,000