Bad Brads BBQ
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.
