ACC 422 Week 3 CPA Practice Exam
Prepare written responses to the following assignments from Ch. 7 & 8 of Intermediate Accounting:
� Problem 7-1
� Problem 7-2
� Problem 8-4
Click the Assignment Files tab to submit your assignment.
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ACC 422 Week 3 CPA Practice Exam
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1. Alta Co. spent $ 400,000 during the current year developing a new idea for a product that was patented during the year. The legal cost of applying for a patent license was $ 40,000. Also, $ 50,000 was spent to successfully defend the rights of the patent against a competitor. The patent has a life of 20 years. Under U. S. GAAP, what amount should Alta capitalize related to the patent?
2. In 2005, Ball Labs incurred the following costs: 3. What was Ball ' s total research and development expense in 2005? 4. South Co. purchased a machine that was installed and placed in service on January 1, 2004 at a cost of $ 240,000. Salvage value was estimated at $ 40,000. The machine is being depreciated over 10 years by the double declining balance method. For the year ended December 31, 2005, what amount should South report as depreciation expense?