Last Updated: 25 May 2023
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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?  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. 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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