life, if any, over which the company can amortize the copyright for
accounting purposes?
19. Cantor Co. purchased a coal mine for $2,000,000. It cost $500,000
to prepare the coal mine for the extraction of the coal. It was
estimated that 750,000 tons of coal would be extracted from the mine
during its useful life. Cantor planned to sell the property for $100,000
at the end of its useful life. During the current year, 15,000 tons of
coal were extracted and sold. What would Cantor's depletion amount
be per ton for the current year?
20. On January 1, 2004, Bay Co. acquired a land lease for a 21-year
period with no option to renew.
21. During 2005, Kent Co. incurred $204,000 of research and
development costs in its laboratory to develop a patent that was
granted on July 1, 2005. Legal fees and other costs associated with
registration of the patent total ed $41,000. The estimated economic life
of the patent is 10 years. What amount should Kent capitalize for the
patent on July 1, 2005?
22. During 2005, Orr Co. incurred the following costs:
23. In its 2005 income statement, what should Orr report as research
and development expense?
24. Goodwill should be tested for value impairment at which of the
following levels?
25. In which of the following situations is the units of production
method of depreciation most appropriate?
26. Johan Co. has an intangible asset, which it estimates will have a
useful life of 10 years, while Abco Co. has goodwill, which has an
indefinite life. Which company should report amortization in its
financial statements?
27. A firm began a mineral exploitation venture during the current
year by spending (1) $40 million for the mineral rights; (2) $100