Question

Question 29 (1 point) In January 2018, Vega Corporation purchased a patent at a cost of $200.000. Legal and filing fees of $50,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In January, 2021, Vega spent $40,000 in legal fees for an unsuccessful defense of the patent and the patent is no longer usable. The amount charged to income (expense and loss) in 2021 related to the patent should be: O $40,000 $65,000 $215,000. $25,000. Question 30 (1 point) Assets acquired in a lump-sum purchase are valued based on: Their assessed valuation. Their relative fair values. The present value of their future cash flows. Their cost plus the difference between their cost and fair values. IN Question 31 (1 point) Archie Co. purchased a framing machine for $45,000 on January 1, 2018. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the sum-of-the-years-digits method depreciation for 2018 and book value at December 31, 2018, would be: $18,000 and $27,000. $16,000 and $29.000 $16,000 and $24,000. $18,000 and $22.000. Question 32 (1 point) Archie Co purchased a framing machine for $45,000 on January 1, 2018. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the straight-line method, depreciation for 2019 and book value at December 31. 2019, would be $10,000 and $20,000 $10,000 and $25,000 $11.250 and $17.500 $11.250 and $22.500

Answer 1

29	Purchase cost of the Patent	$        2,00,000
	Add:Legal and filing fees	$           50,000
	Cost of the Patent	$        2,50,000
	Amortization per year($250,000/10)	$           25,000
	Carrying value of the patent as on Jan 2021	$        1,75,000
	[$250,000-($25000*3)]
	Add:Legal fees for defending the title	$           40,000
	Expense charged to income statement	$        2,15,000
	So Option C is the answer
30	The Purchase price of the asset will be allocated on the basis of relative fair value of each asset
	So Option B is the answer
31	Depreciation for 2018 =($45,000-$5,000)*4/10 =$16,000
	Book value of asset as on Dec 31,2018 =$45,000 - $16,000 =$29,000
	So Option B is the answer
32	Straight Line method depreciation per year =($45,000 - $5,000) / 4 Years =$10,000
	Book value of asset as on Dec 31,2019 =$45,000 - $10,000 - $10,000 =$25,000
	So Option B is the answer