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What total amount of amortization expense should have been recorded 



1.	Rich Corporation purchased a limited-life intangible asset for $210,000 on May 1, 2008. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2010?
A)	$    -0-.
B)	$42,000
C)	$56,000
D)	$63,000

2.	Thompson Company incurred research and development costs of $100,000 and legal fees of $40,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Thompson record as Patent Amortization Expense in the first year?
A)	$0.
B)	$  4,000.
C)	$  7,000.
D)	$14,000.

3.	Blue Sky Company's 12/31/10 balance sheet reports assets of $5,000,000 and liabilities of $2,000,000. All of Blue Sky's assets' book values approximate their fair value, except for land, which has a fair value that is $300,000 greater than its book value. On 12/31/10, Horace Wimp Corporation paid $5,100,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?
A)	$    -0-
B)	$100,000
C)	$1,800,000
D)	$2,100,000

4.	A company acquires a patent for a drug with a remaining legal and useful life of six years on January 1, 2009 for $1,800,000. The company uses straight-line amortization for patents. On January 2, 2011, a new patent is received for a timed-release version of the same drug. The new patent has a legal and useful life of twenty years. The least amount of amortization that could be recorded in 2011 is
A)	$300,000.
B)	$  60,000.
C)	$  81,818.
D)	$  69,000.

5.	The following information is available for Barkley Company's patents:

Cost	$1,720,000
Carrying amount	860,000
Expected future net cash flows	800,000
Fair value	650,000

Barkley would record a loss on impairment of
A)	$  60,000.
B)	$210,000.
C)	$860,000.
D)	$920,000.




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