Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash. They also incurred a shipping cost of $400 to get the equipment to its factory. The fair value of this equipment is $7,000. For what amount should Bad Brads BBQ record the equipment? | $5,000. | | $5,400. | | $7,000. | | $7,400. | Research and development costs should be: | Expensed in the period incurred. | | Expensed in the period they are determined to be unsuccessful. | | Deferred pending determination of success. | | Expensed if unsuccessful, capitalized if successful. | Goodwill is: Amortized over the greater of its estimated life or forty years. | | Only recorded by the seller of a business. | | The excess of the fair value of a business as a whole over the fair value of all net identifiable assets. | | Recorded when created internally through advertising expense. | Which of the following is considered a “contra” account? | Unearned Revenue. | | Goodwill. | | Accumulated Depreciation. | | Costs of Good Sold. | Using the straight-line method, depreciation expense for 2012 would be: | $12,000. | | $11,000. | | $60,000. | | None of the other answers are correct. Using the straight-line method, the book value at December 31, 2012 would be: | $44,000. | | $49,000. | | $55,000. | | $60,000. | Using the double-declining balance method, depreciation expense for 2012 would be: | $24,000. | | $22,000. | | $19,000. | | $20,000. | Using the double-declining balance method, depreciation expense for 2013 would be: | $22,000. | | $13,200. | | $14,400. | | $24,000. | Berry Co. purchases a patent on January 1, 2012, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. ses the straight-line method, what is the amortization expense for the year ended December 31, 2013? | $0. | | $8,000. | | $16,000. | | $40,000. | Abbott Company purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. Abbott should record: | a gain of $1,000. | | a loss of $1,000. | | neither a gain nor a loss – the computer was sold at its book value. | | neither a gain nor a loss – the gain that occurred in this case would not be recognized. |
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