At the end of 2013, Clock Products, Inc determined that one of its patents was worthless. The patent had a cost of $300,000 . The patent had been amortized for 5 years of its estimated 15-year legal life. Which of the following statements is correct?
a. Clock Products must continue to amortize the patent over its remaining 10 years of life.
b. The patent must be reduced to 5/15, or 33.3% of its original cost and amortized over the remaining 10 years.
c. The remaining unamortized cost must be removed from the accounting records and treated as a loss on the income statement.
d. Clock Products must correct its financial statements for the past five years, so that the entire cost is allocated to that five-year period.
c
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All of the following are typical inventory costs except?
a. Order cost b. Stockout cost c. Inventory carrying cost d. Selling cost
In digital identity systems, a __________ functions as a certification program
What will be an ideal response?
Which of the following statements is correct?
A. Establishing standards is the least difficult aspect of using a standard cost system. B. Managers should be praised or punished based on variances. C. Budget slack exists when performance standards are set at an ideal, unachievable level. D. A favorable variance may indicate the existence of unfavorable conditions.
Five years ago, Burton Company purchased equipment with an expected useful life of 5 years. The initial cost of the equipment was $160,000. Burton's cost of capital is 12%; when it purchased the equipment, Burton computed a net present value of $15,824 for the investment. During the current year, the equipment reached the end of its useful life. Burton determined that, over the 5-year life, the equipment had generated annual cash inflows of $46,000. Required:Conduct a post-audit to determine whether the equipment achieved the net present value the company had expected. Based on the results actually achieved, was the asset in fact an acceptable investment? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
What will be an ideal response?