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 pat ent 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?
38) Twilight Corporation acquired End-of-the-World Products on
January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as
a result of that purchase. At December 31, 2008, the End-of-theWorld Products Division had a fair value of $1,700,000. The net
identifiable assets of the Division (excluding goodwill) had a fair
value of $1,450,000 at that time. What amount of loss on impairment
of goodwill should Twilight record in 2008?
39) Fleming Corporation acquired Out-of-Sight Products on January
1, 2008 for $4,000,000, and recorded goodwill of $750,000 as a result
of that purchase. At December 31, 2008, the Out-of-Sight Products
Division had a fair value of $3,400,000. The net identifiable assets of
the Division (excluding goodwill) had a fair value of $2,900,000 at
that time. What amount of loss on impairment of goodwill should
Fleming record in 2008?
40) When a patent is amortized, the credit is usually made to
41) The reason goodwill is sometimes referred to as a master
valuation account is because
42) Easton Company and Lofton Company were combined in a
purchase transaction. Easton was able to acquire Lofton at a bargain
price. The sum of the market or appraised values of identifiable assets
acquired less the fair value of liabilities assumed exceeded the cost to