on base of this asset?
33) Starr Company purchased a depreciable asset for $150,000.
The estimated salvage value is $10,000, and the estimated useful
life is 8 years. The doubledeclining balance method will be used for depreciation. What is
the depreciation expense for the second year on this asset?
34) Costs incurred internally to create intangibles are
35) Factors considered in determining an intangible asset’s usef
ul life include all of the following EXCEPT
36) The cost of purchasing patent rights for a product that might
otherwise have seriously competed with one of the purchaser’s p
atented products should be
37) Malrom Manufacturing Company acquired a patent on a ma
nufacturing process on January 1, 2006 for $10,000,000. It was
expected to have a 10 year life and no residual value. Malrom us
es straightline amortization for patents. On December 31, 2007, the expect
ed future cash flows expected from the patent were expected to
be $800,000 per year for the next eight years. The present value
of these cash flows, discounted at Malrom’s market interest rate,
is $4,800,000. At what amount should the patent be carried on t
he December 31, 2007 balance sheet?
38) Mining Company acquired a patent on an oil extraction tech
nique on January 1, 2006 for $5,000,000. It was expected to hav
e a 10 year life and no residual value. Mining uses straightline amortization for patents. On December 31, 2007, the expect
ed future cash flows expected from the patent were expected to
be $600,000 per year for the next eight years. The present value
of these cash flows, discounted at Mining’s market interest rate,
is $2,800,000. At what amount should the patent be carried on th
e December 31, 2007 balance sheet?
39) General Products Company bought Special Products Divisio
n in 2006 and appropriately booked $250,000 of goodwill relate
d to the purchase. On December 31, 2007, the fair value of Spec
ial Products Division is $2,000,000 and it is carried on General
Product’s books for a total of $1,700,000, including the goodwil
l. An analysis of Special Products Division’s assets indicates tha