29) The term "depreciable cost," or "depreciable base," as it is used in
accounting, refers to
30) Which of the following most accurately reflects the concept of
depreciation as used in accounting?
31) Prentice Company purchased a depreciable asset for $200,000.
The estimated salvage value is $20,000, and the estimated useful life
is 10 years. The straight-line method will be used for depreciation.
What is the depreciation base of this asset?
32) Pine Company purchased a depreciable asset for $360,000. The
estimated salvage value is $24,000, and the estimated useful life is 8
years. The double-declining balance method will be used for
depreciation. What is the depreciation expense for the second year on
this asset?
33) Bigbie Company purchased a depreciable asset for $600,000. The
estimated salvage value is $30,000, and the estimated useful life is
10,000 hours. Bigbie used the asset for 1,100 hours in the current
year. The activity method will be used for depreciation. What is the
depreciation expense on this asset?
34) The cost of purchasing patent rights for a product that might
otherwise have seriously competed with one of the purchaser's
patented products should be
35) Riser Corporation was granted a patent on a product on January 1,
1998. To protect its patent, the corporation purchased on January 1,
2007 a patent on a competing product which was originally issued on
January 10, 2003. Because of its unique plant, Riser Corporation does
NOT feel the competing patent can be used in producing a product.
The cost of the competing patent should be
36) Which of the following methods of amortization is normally used
for intangible assets?
37) General Products Company bought Special Products Division in
2006 and appropriately booked $250,000 of goodwill related to the
purchase. On December 31, 2007, the fair value of Special Products
Division is $2,000,000 and it is carried on General Product’s books
for a total of $1,700,000, including the goodwill. An analysis of
Special Products Division’s assets indicates that goodwill of $200,000
exists on December 31, 2007. What goodwill impairment should be
recognized by General Products in 2007?