The Buddy Burger Corporation has $3.5 million in long-lived assets and has an accumulated amortization account of $1.1 million. Which of the following statements is true?

None of the above

The book value of long-lived assets is $2.4 million

The resale value of long-lived assets is $2.4 million

The market value of long-lived assets is $3.5 million

The carrying value of long-lived assets is $3.5 million

6.A company bought new equipment and thought it would have a seven year useful life. After three years, the company decided that the equipment would be useful for only three years. (The company has always used the Straight Line Method to depreciation the equipment.)

This would be considered a:

change in accounting principle

contingency

recording error

change in accounting estimate

None of the other alternatives are correct

9.A company buys land and building for $240,000. The market value of the land is $150,000 and the building is $30,000. What cost will be allocated to the building?

$240,000

$192,000

$40,000

None of the other alternatives are correct

$120,000

10.American Outfitters purchases a company, Canadian Outfitters, for a price of $400,000. American Outfitters assets have a market value of $3M. Canadian Outfitters assets have a book value of $500,000 and a market value of $350,000. Canadian Outfitters liabilities have a market value of $30,000. Canadian Outfitters liabilities have a book value of $50,000. American Outfitters liabilities have a market value of $32,000. What is the amount of Goodwill that results from the purchase of American Outfitters of Canadian Outfitters?

$ 70,000

$0 as goodwill only arises when a company purchases a company in the same line of business as its own and this is unknown in this case

$0 as goodwill cannot arise from this type of purchase

$ 80,000

$100,000