Reference no: EM132437344

Questions -

Q1) On January 2, 2019, Urban Ltd. purchased equipment to be used in its manufacturing operations. The equipment has an estimated useful life of ten years, and an estimated residual value of $33,000. It was also estimated that the equipment would be used a total of 63,000 hours over its useful life. The depreciation expense for this equipment was $156,000 for calendar 2020, using the units of production method. The machine was used for 7,500 hours in 2020. The acquisition cost of the equipment was

a. $1,587,600.

b. $1,527,000.

c. $1,066,200.

d. $1,343,400.

Q2) On January 1, 2016, Michigan Corp. purchased a trademark for $300,000, which had an estimated useful life of 15 years. In January 2020, Michigan paid $44,000 for legal fees in a successful defence of the trademark. The amortization expense for this asset for calendar 2020, should be

a. $24,000.

b. $22,933.

c. $20,000

d. $0.

Q3) Cayman Corp. incurred $140,000 of basic research and $35,000 of development costs to develop a product for which a patent was granted on January 2, 2015. Legal fees and other costs associated with registration of the patent totalled $50,000. On March 31, 2020, Cayman paid $75,000 for legal fees in a successful defence of the patent. The total amount capitalized for the patent through March 31, 2020 should be

a. $300,000.

b. $265,000.

c. $160,000.

d. $125,000.