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On December 31, 2005, Bit Co. had capitalized costs for a new
computer software product with an economic life of five years.
Sales for 2006 were 30 percent of expected total sales of the
software. At December 31, 2006, the software had a net realizable
value equal to 90 percent of the capitalized cost. What percentage
of the original capitalized cost should be reported as the net
amount on Bit's December 31, 2006 balance sheet?
Question 18
On January 1, 2001, Babson, Inc. leased two automobiles for
executive use. The lease requires Babson to make five annual
payments of $13,000 beginning January 1, 2001. At the end of the
lease term, December 31, 2005, Babson guarantees the residual
value of the automobiles will total $10,000. The lease qualifies as a
capital lease. The interest rate implicit in the lease is 9%. Present
value factors for the 9% rate implicit in the lease are as follows:
Babson's recorded capital lease liability immediately after the
first required payment should be
Question 19
YIV Inc. is a multidivisional corporation which has both
intersegment sales and sales to unaffiliated customers. YIV should
report segment financial information for each division meeting
which of the following criteria?
Question 20
Brill Co. made the following expenditures during 2004: What
amount of these expenditures should Brill report in its 2004
income statement as research and development expenses?
Question 1