Question

1. In 2013, Book Creations Company published a management book and got it copyrighted in the same year. The legal life of the book is 15 years and estimated useful life is 10 years. For how many years should the cost of copyright be amortized?

Question 1 options:

	a. 70 years
	b. 15 years
	c. 10 years
	d. 12.5 years
	e. 0 year

2.Kremlin Company pays $2,900,000 for all of the outstanding common stock of Reticular Corporation. Reticular has assets on its balance sheet with a value of $1,500,000. Reticular has no liabilities at this time. What is goodwill in this purchase?

Question 2 options:

	a. $1,400,000
	b. $0
	c. $1,000,000
	d. $400,000

3.Which of the following is a reason for a company's intangible assets figures to grow to incredible size?

Question 3 options:

	a. Internally developed copyrights and patents
	b. Increase in the fair value of the intangibles assets held by a company
	c. Copyrights and patents acquired from outside owners
	d. Purchase of intangible assets with legal life exceeding 15 years
	e. Increase in contingent liabilities in a year

4.On January 1, 2013 Williams Company purchased a copyright for $220,000. The copyright has a useful life of 4 years and a legal life of 12 years. The entry to record the acquisition of copyright will include a:

Question 4 options:

	a. debit to cash and credit to copyright for $220,000.
	b. debit to copyright and credit to cash for $220,000.
	c. debit amortization expense and credit to copyright for $55,000.
	d. debit to goodwill and credit to cash for $55,000.
	e. debit to cash and credit to purchases for $220,000.

Answer 1

1	The copyright will be amortized on the basis of estimated useful life, which is 10 years
	So Option C is the answer
2	The goodwill is the difference between the acquistion value and Book value of Net Assets of Acquired company
	So Goodwill =$2,900,000 - $1,500,000 =$1,400,000
	So Option A is the answer
3	One of the main reason for a company's Intangible assets to grow in incredible size is:
	Copyrights and Patents may be acquired from outside owners.
	So Option C is the answer
4	Debit- Copyright and credit cash by $220,000
	So Option B is the answer