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ACCT 553 Midterm Exam
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1. (TCO C) Under current accounting practice, intangible assets are
classified as (Points: 5)
2. (TCO C) Which of the following intangible assets should not be
amortized? (Points: 5)
3. (TCO C) The intangible asset goodwill may be (Points: 5)
4. (TCO C) ELO Corporation purchased a patent for $90,000 on
September 1, 2008. It had a useful life of ten years. On January 1,
2010, ELO spent $22,000 to successfully defend the patent in a
lawsuit. ELO feels that as of that date, the remaining useful life is
five years. What amount should be reported for patent amortization
expense for 2010? (Points: 5)
5. (TCO C) During 2011, Bond Company purchased the net assets
of May Corporation for $1,000,000. On the date of the transaction,
May had $300,000 of liabilities. The fair value of May's assets when
acquired were as follows:
6. (TCO D) Which of the following is a condition for accruing a
liability for the cost of compensation for future absences? (Points:
5)
7. (TCO D) Which of the following taxes does not represent a
payroll deduction a company may incur? (Points: 5)
8. (TCO D) Assume that a manufacturing corporation has (1) good
quality control, (2) a one-year operating cycle, (3) a relatively stable
pattern of annual sales, and (4) a continuing policy of guaranteeing
new products against defects for three years that has resulted in