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. Wh at 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? 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-the-World Products Division had a fair value of
$1,700,000. The net identifiable assets of the Division (excluding