INTERMEDIATE ACCOUNTING II - D104 WGU :ASSET VALUATION EXAM 2025
QUESTIONS AND ANSWERS
1. On July 2, 2014, Adele Company bought a trademark from Robert, Inc. for
$2,750,000. An independent research company estimated that the
remaining useful life of the trademark was 10 years. Its unamortized cost
on Robert's books was $1,600,000. In Adele's 2014 income statement,
what amount should be reported as amortization expense?
$275,000.
$137,500.
$160,000.
$80,000.
2. Describe the significance of trade secrets as intangible assets in
accounting.
Trade secrets are only relevant for tax purposes and not for
financial reporting.
Trade secrets are valuable intangible assets that provide a
competitive advantage and are not disclosed publicly.
Trade secrets are physical assets that can be easily quantified in
financial statements.
Trade secrets are liabilities that must be reported on the balance
sheet.
3. A large publicly held company has developed and registered a
trademark during 2017. How should the cost of acquiring and registering
the trademark be accounted for if it is considered to have a limited life?
Amortized over its useful life
Charged to an asset account that should not be amortized
,Amortized over 10 years regardless of its useful life
, Expensed as incurred
4. Acquisition costs are ___________ for Trademarks/Trade Names
expensed
write offs
capitalized
withheld
5. What is the value used to record machinery purchased with a long-term
note?
Cost of the machinery at purchase
Replacement cost of the machinery
Present value of the future payments
Market value of the machinery
6. Five years ago, you purchased a new machine for $100,000. The
replacement cost today for the machine is $120,000. The machine has
depreciated by $25,000 during the last five years. The Actual Cash value
of the machine today is
$120,000
$75,000
$100,000
$95,000
7. What is the annual test required for indefinite life intangible assets?
Amortization
Depreciation
Capitalization
QUESTIONS AND ANSWERS
1. On July 2, 2014, Adele Company bought a trademark from Robert, Inc. for
$2,750,000. An independent research company estimated that the
remaining useful life of the trademark was 10 years. Its unamortized cost
on Robert's books was $1,600,000. In Adele's 2014 income statement,
what amount should be reported as amortization expense?
$275,000.
$137,500.
$160,000.
$80,000.
2. Describe the significance of trade secrets as intangible assets in
accounting.
Trade secrets are only relevant for tax purposes and not for
financial reporting.
Trade secrets are valuable intangible assets that provide a
competitive advantage and are not disclosed publicly.
Trade secrets are physical assets that can be easily quantified in
financial statements.
Trade secrets are liabilities that must be reported on the balance
sheet.
3. A large publicly held company has developed and registered a
trademark during 2017. How should the cost of acquiring and registering
the trademark be accounted for if it is considered to have a limited life?
Amortized over its useful life
Charged to an asset account that should not be amortized
,Amortized over 10 years regardless of its useful life
, Expensed as incurred
4. Acquisition costs are ___________ for Trademarks/Trade Names
expensed
write offs
capitalized
withheld
5. What is the value used to record machinery purchased with a long-term
note?
Cost of the machinery at purchase
Replacement cost of the machinery
Present value of the future payments
Market value of the machinery
6. Five years ago, you purchased a new machine for $100,000. The
replacement cost today for the machine is $120,000. The machine has
depreciated by $25,000 during the last five years. The Actual Cash value
of the machine today is
$120,000
$75,000
$100,000
$95,000
7. What is the annual test required for indefinite life intangible assets?
Amortization
Depreciation
Capitalization
