Accounting Final Exam Flashcards
1
Q
What is consigned inventory?
A
Goods that are shipped, but title remains with the shipper
2
Q
When using a perpetual inventory system,
a. no Purchases account is used.
b. a Cost of Goods Sold account is used.
c. two entries are required to record a sale.
d. all of these.
A
All of these
3
Q
Goods in transit which are shipped f.o.b. shipping point should be
A
included in the inventory of the buyer.
4
Q
Goods in transit which are shipped f.o.b. destination should be
A
included in the inventory of the seller.
5
Q
Which of the following items should be included in a company’s inventory at the balance sheet date?
a. Goods in transit which were purchased f.o.b. destination.
b. Goods received from another company for sale on consignment.
c. Goods sold to a customer which are being held for the customer to call for at his or her convenience.
d. None of these.
A
None of these
6
Q
During 2012 Carne Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2013. Nolan then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Carne. In 2013 when Carne repurchased the inventory, Nolan used the proceeds to repay its bank loan.
This transaction is known as a
A
product financing arrangement.
7
Q
During 2012 Carne Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2013. Nolan then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Carne. In 2013 when Carne repurchased the inventory, Nolan used the proceeds to repay its bank loan.
On whose books should the cost of the inventory appear at the December 31, 2012 balance sheet date?
A
Carne Corporation
8
Q
Goods on consignment are
A
recorded in a Consignment Out account which is an inventory account.
9
Q
Valuation of inventories requires the determination of all of the following except
A
the cost of goods held on consign¬ment from other companies.
10
Q
The accountant for the Pryor Sales Company is preparing the income statement for 2012 and the balance sheet at December 31, 2012. Pryor uses the periodic inventory system. The January 1, 2012 merchandise inventory balance will appear
A
only in the cost of goods sold section of the income statement.
11
Q
If the beginning inventory for 2012 is overstated, the effects of this error on cost of goods sold for 2012, net income for 2012, and assets at December 31, 2013, respectively, are
A
overstatement, understatement, no effect.
12
Q
The failure to record a purchase of merchandise on account even though the goods are properly included in the physical inventory results in
A
an understatement of liabilities and an overstatement of owners’ equity.
13
Q
Morgan Manufacturing Company has the following account balances at year end:
Office supplies $ 4,000 Raw materials 27,000 Work-in-process 59,000 Finished goods 82,000 Prepaid insurance 6,000
What amount should Morgan report as inventories in its balance sheet?
A
$168,000
14
Q
Lawson Manufacturing Company has the following account balances at year end:
Office supplies $ 4,000 Raw materials 27,000 Work-in-process 59,000 Finished goods 97,000 Prepaid insurance 6,000
What amount should Lawson report as inventories in its balance sheet?
A
$183,000
15
Q
Elkins Corporation uses the perpetual inventory method. On March 1, it purchased $20,000 of inventory, terms 2/10, n/30. On March 3, Elkins returned goods that cost $2,000. On March 9, Elkins paid the supplier. On March 9, Elkins should credit
A
inventory for $360.
16
Q
Malone Corporation uses the perpetual inventory method. On March 1, it purchased $50,000 of inventory, terms 2/10, n/30. On March 3, Malone returned goods that cost $5,000. On March 9, Malone paid the supplier. On March 9, Malone should credit
A
inventory for $900.
17
Q
Bell Inc. took a physical inventory at the end of the year and determined that $780,000 of goods were on hand. In addition, Bell, Inc. determined that $60,000 of goods that were in transit that were shipped f.o.b. shipping point were actually received two days after the inventory count and that the company had $90,000 of goods out on consignment. What amount should Bell report as inventory at the end of the year?
A
$930,000
18
Q
Bell Inc. took a physical inventory at the end of the year and determined that $760,000 of goods were on hand. In addition, the following items were not included in the physical count. Bell, Inc. determined that $96,000 of goods were in transit that were shipped f.o.b. destination (goods were actually received by the company three days after the inventory count).The company sold $40,000 worth of inventory f.o.b. destination. What amount should Bell report as inventory at the end of the year?
A
$800,000
19
Q
Risers Inc. reported total assets of $1,800,000 and net income of $200,000 for the current year. Risers determined that inventory was overstated by $15,000 at the beginning of the year (this was not corrected). What is the corrected amount for total assets and net income for the year?
A
$1,800,000 and $215,000
20
Q
Risers Inc. reported total assets of $3,200,000 and net income of $170,000 for the current year. Risers determined that inventory was understated by $46,000 at the beginning of the year and $20,000 at the end of the year. What is the corrected amount for total assets and net income for the year?
A
$3,220,000 and $144,000
21
Q
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2013 and 2012 contained errors as follows: 2013: Ending inventory $4,500 Depreciation expense $3,000 understated 2012: Ending inventory $12,000 overstated Depreciation expense $9,000 overstated
Assume that the proper correcting entries were made at December 31, 2012. By how much will 2013 income before taxes be overstated or understated?
A
$7,500 overstated
22
Q
Which of the following is true about lower-of-cost-or-market?
a. It is inconsistent because losses are recognized but not gains.
b. It usually understates assets.
c. It can increase future income.
d. All of these.
A
All of these
23
Q
The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing the inventory is required where there is evidence that when the goods are sold in the ordinary course of business their
A
future utility will be less than their cost.
24
Q
When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the term “market”?
A
Current replacement cost
25
In no case can "market" in the lower-of-cost-or-market rule be more than
estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal.
26
Designated market value
is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin.
27
Lower-of-cost-or-market
is most conservative if applied to individual items of inventory.
28
An item of inventory purchased this period for $15.00 has been incorrectly written down to its current replacement cost of $10.00. It sells during the following period for $30.00, its normal selling price, with disposal costs of $3.00 and normal profit of $12.00. Which of the following statements is not true?
a. The cost of sales of the following year will be understated.
b. The current year's income is understated.
c. The closing inventory of the current year is understated.
d. Income of the following year will be understated.
Income of the following year will be understated.
29
When the cost-of-goods-sold method is used to record inventory at market
the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold.
30
Lower-of-cost-or-market as it applies to inventory is best described as the
drop of future utility below its original cost.
31
The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the
net realizable value less normal profit margin.
32
Given the acquisition cost of product ALPHA is $17, the net realizable value for product ALPHA is $16.70, the normal profit for product ALPHA is $1.24, and the market value (replacement cost) for product ALPHA is $14.72, what is the proper per unit inventory price for product ALPHA?
$15.46
33
Given the acquisition cost of product Dominoe is $43.31, the net realizable value for product Dominoe is $38.49, the normal profit for product Dominoe is $4.32, and the market value (replacement cost) for product Dominoe is $40.68, what is the proper
per unit inventory price for product Dominoe?
$38.49
34
Given the historical cost of product Z is $80, the selling price of product Z is $95, costs to sell product Z are $11, the replacement cost for product Z is $83, and the normal profit margin is 40% of sales price, what is the market value that should be used in the lower-of-cost-or-market comparison?
$83
35
Given the historical cost of product Z is $80, the selling price of product Z is $95, costs to sell product Z are $11, the replacement cost for product Z is $83, and the normal profit margin is 40% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method?
$80
36
Given the historical cost of product Dominoe is $43, the selling price of product Dominoe is $60, costs to sell product Dominoe are $11, the replacement cost for product Dominoe is $40, and the normal profit margin is 20% of sales price, what is the cost amount that should be used in the lower-of-cost-or-market comparison?
$43
37
Given the historical cost of product Dominoe is $43, the selling price of product Dominoe is $60, costs to sell product Dominoe are $11, the replacement cost for product Dominoe is $40, and the normal profit margin is 20% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method?
$40
38
Robust Inc. has the following information related to an item in its ending inventory. Product 66 has a cost of $3,250, a replacement cost of $3,100, a net realizable value of $3,200, and a normal profit margin of $200. What is the final lower-of-cost-or-market inventory value for product 66?
$3,100
39
Robust Inc. has the following information related to an item in its ending inventory. Packit (Product # 874) has a cost of $524, a replacement cost of $402, a net realizable value of $468, and a normal profit margin of $21. What is the final lower-of-cost-or-market inventory value for Packit?
$447
40
Robust Inc. has the following information related to an item in its ending inventory. Acer Top has a cost of $251, a replacement cost of $234, a net realizable value of $266, and a normal profit margin of $34. What is the final lower-of-cost-or-market inventory value for Acer Top?
$234
41
Plant assets may properly include
a. deposits on machinery not yet received.
b. idle equipment awaiting sale.
c. land held for possible use as a future plant site.
d. none of these.
None of these
42
Which of the following is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for resale
c. Acquired for use
d. Yields services over a number of years
Acquired for resale
43
Which of these is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.
All of these are major characteristics of a plant asset.
44
Cotton Hotel Corporation recently purchased Emporia Hotel and the land on which it is located with the plan to tear down the Emporia Hotel and build a new luxury hotel on the site. The cost of the Emporia Hotel should be
capitalized as part of the cost of the land.
45
The cost of land does not include
costs of improvements with limited lives.
46
The cost of land typically includes the purchase price and all of the following costs except
private driveways and parking lots.
47
If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on
the intention of management for the property when the building was acquired.
48
The debit for a sales tax properly levied and paid on the purchase of machinery preferably would be a charge to
the machinery account.
49
Fences and parking lots are reported on the balance sheet as
land improvements
50
Worthington Chandler Company purchased equipment for $12,000. Sales tax on the purchase was $800. Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225. What is the cost of the equipment?
$13,225
51
Fogelberg Company purchased equipment for $15,000. Sales tax on the purchase was $900. Other costs incurred were freight charges of $240, repairs of $420 for damage during installation, and installation costs of $270. What is the cost of the equipment?
$16,410
52
During self-construction of an asset by Samuelson Company, the following were among the costs incurred:
- Fixed overhead for the year $1,000,000
- Portion of $1,000,000 fixed overhead that would be allocated to asset if it were normal production 50,000
- Variable overhead attributable to self-construction 35,000
What amount of overhead should be included in the cost of the self-constructed asset?
$85,000
53
During self-construction of an asset by Richardson Company, the following were among the costs incurred:
- Fixed overhead for the year $1,000,000
- Portion of $1,000,000 fixed overhead that would be allocated to asset if it were normal production 60,000
- Variable overhead attributable to self-construction 75,000
What amount of overhead should be included in the cost of the self-constructed asset?
$135,000
54
Mendenhall Corporation constructed a building at a cost of $10,000,000. Average accumulated expenditures were $4,000,000, actual interest was $600,000, and avoidable interest was $400,000. If the salvage value is $800,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is
$240,000
55
Messersmith Company is constructing a building. Construction began in 2012 and the building was completed 12/31/12. Messersmith made payments to the construction company of $1,500,000 on 7/1, $3,150,000 on 9/1, and $3,000,000 on 12/31. Average accumulated expenditures were
$1,800,000
56
Huffman Corporation constructed a building at a cost of $20,000,000. Average accumulated expenditures were $8,000,000, actual interest was $1,200,000, and avoidable interest was $800,000. If the salvage value is $1,600,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is
$480,000
57
Gutierrez Company is constructing a building. Construction began in 2012 and the building was completed 12/31/12. Gutierrez made payments to the construction company of $2,000,000 on 7/1, $4,400,000 on 9/1, and $4,000,000 on 12/31. Average accumulated expenditures were
$2,466,667
58
On May 1, 2012, Goodman Company began construction of a building. Expenditures of $240,000 were incurred monthly for 5 months beginning on May 1. The building was completed and ready for occupancy on September 1, 2012. For the purpose of determining the amount of interest cost to be capitalized, the average accumulated expenditures on the building during 2012 were
$200,000
59
During 2012, Kimmel Co. incurred average accumulated expenditures of $600,000 during construction of assets that qualified for capitalization of interest. The only debt outstanding during 2012 was a $750,000, 10%, 5-year note payable dated January 1, 2010. What is the amount of interest that should be capitalized by Kimmel during 2012?
$60,000
60
On March 1, Felt Co. began construction of a small building. Payments of $160,000 were made monthly for three months beginning March 1. The building was completed and ready for occupancy on June 1. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are
$80,000
61
On March 1, Imhoff Co. began construction of a small building. Payments of $240,000 were made monthly for four months beginning March 1. The building was completed and ready for occupancy on June 1. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are
$120,000
62
The following is true of depreciation accounting.
a. It is not a matter of valuation.
b. It is part of the matching of revenues and expenses.
c. It retains funds by reducing income taxes and dividends.
d. All of these.
All of these
63
Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?
Systematic and rational allocation
64
Depreciation accounting
retains funds
65
Which of the following most accurately reflects the concept of depreciation as used in accounting?
The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
66
The major difference between the service life of an asset and its physical life is that
service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last.
67
The term "depreciable base," or "depreciation base," as it is used in accounting, refers to
the total amount to be charged (debited) to expense over an asset's useful life.
68
Economic factors that shorten the service life of an asset include
a. obsolescence.
b. supersession.
c. inadequacy.
d. all of these.
All of these
69
Which of the following is not one of the basic questions that must be answered before the amount of depreciation charge can be computed?
a. What is the depreciation base to use for the asset?
b. What is the asset's useful life?
c. What method of cost apportionment is best for this asset?
d. What product or service is the asset related to?
What product or service is the asset related to?
70
Which of the following is a realistic assumption of the straight-line method of depreciation?
Depreciation is a function of time rather than a function of usage.
71
The activity method of depreciation
is a variable charge approach.
72
For income statement purposes, depreciation is a variable expense if the depreciation method used is
units-of-production.
73
Ferguson Company purchased a depreciable asset for $120,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
$110,000
74
Hamilton Company purchased a depreciable asset for $240,000. The estimated salvage value is $20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
$220,000
75
Solar Products purchased a machine for $39,000 on July 1, 2012. The company intends to depreciate it over 4 years using the double-declining balance method. Salvage value is $3,000. Depreciation for 2012 is
$9,750
76
Solar Products purchased a machine for $39,000 on July 1, 2012. The company intends to depreciate it over 4 years using the double-declining balance method. Salvage value is $3,000. Depreciation for 2013 is
$14,625
77
Gardner Corporation purchased a truck at the beginning of 2012 for $90,000. The truck is estimated to have a salvage value of $3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2012 and 32,000 miles in 2013. What is the depreciation expense for 2012?
$12,960
78
Gardner Corporation purchased a truck at the beginning of 2012 for $90,000. The truck is estimated to have a salvage value of $3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2012 and 32,000 miles in 2013. What is the depreciation expense for 2013?
$23,040
79
Kinder Company purchased a depreciable asset for $280,000. The estimated salvage value is $14,000, and the estimated useful life is 10,000 hours. Kinder used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?
$29,260
80
Jamar Company purchased a depreciable asset for $225,000. The estimated salvage value is $15,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?
$42,188
81
Engels Company purchased a depreciable asset for $800,000. The estimated salvage value is $40,000, and the estimated useful life is 10,000 hours. Engels used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?
$83,600
82
Hart Company purchased a depreciable asset for $450,000. The estimated salvage value is $30,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?
$84,375
83
On July 1, 2012, Gonzalez Corporation purchased factory equipment for $225,000. Salvage value was estimated to be $6,000. The equipment will be depreciated over ten years using the double-declining balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation expense for 2013 on this equipment of
$40,500
84
Krause Corporation purchased factory equipment that was installed and put into service January 2, 2012, at a total cost of $120,000. Salvage value was estimated at $8,000. The equipment is being depreciated over four years using the double-declining balance method. For the year 2013, Krause should record depreciation expense on this equipment of
$30,000
85
On April 13, 2012, Neill Co. purchased machinery for $168,000. Salvage value was estimated to be $7,000. The machinery will be depreciated over ten years using the double-declining balance method. If depreciation is computed on the basis of the nearest full month, Neill should record depreciation expense for 2013 on this machinery of
$28,560
86
Matile Co. purchased machinery that was installed and ready for use on January 3, 2012, at a total cost of $115,000. Salvage value was estimated at $15,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2013, Matile should record depreciation expense on this machinery of
$27,600
87
A plant asset has a cost of $32,000 and a salvage value of $8,000. The asset has a three-year life. If depreciation in the third year amounted to $4,000, which depreciation method was used?
Sum-of-the-years'-digits
88
Companies should test indefinite life intangible assets at least annually for:
impairment.
89
One factor that is not considered in determining the useful life of an intangible asset is
salvage value
90
```
Which intangible assets are amortized?
Limited-Life Indefinite-Life
a. Yes Yes
b. Yes No
c. No Yes
d. No No
```
Limited-Life Indefinite-Life
| b. Yes No
91
The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be
amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product.
92
Broadway Corporation was granted a patent on a product on January 1, 2001. To protect its patent, the corporation purchased on January 1, 2012 a patent on a competing product which was originally issued on January 10, 2008. Because of its unique plant, Broadway Corporation does not feel the competing patent can be used in producing a product. The cost of the competing patent should be
amortized over a maximum period of 9 years.
93
Wriglee, Inc. went to court this year and successfully defended its patent from infringe-ment by a competitor. The cost of this defense should be charged to
patents and amortized over the remaining useful life of the patent.
94
Which of the following is not an intangible asset?
a. Trade name
b. Research and development costs
c. Franchise
d. Copyrights
Research and development costs
95
Which of the following intangible assets should not be amortized?
a. Copyrights
b. Customer lists
c. Perpetual franchises
d. All of these intangible assets should be amortized.
Perpetual franchises
96
When a patent is amortized, the credit is usually made to
the Patent account.
97
When a company develops a trademark the costs directly related to securing it should generally be capitalized. Which of the following costs associated with a trademark would not be allowed to be capitalized?
a. Attorney fees.
b. Consulting fees.
c. Research and development fees.
d. Design costs.
Research and development fees
98
In a business combination, companies record identifiable intangible assets that they can reliably measure. All other intangible assets, too difficult to identify or measure, are recorded as:
goodwill
99
Goodwill may be recorded when:
one company acquires another in a business combination.
100
When a new company is acquired, which of these intangible assets, unrecorded on the acquired company’s books, might be recorded in addition to goodwill?
a. A brand name.
b. A patent.
c. A customer list.
d. All of the above.
All of the above
101
Which of the following intangible assets could not be sold by a business to raise needed cash for a capital project?
a. Patent.
b. Copyright.
c. Goodwill.
d. Brand Name.
Goodwill
102
The reason goodwill is sometimes referred to as a master valuation account is because
it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business.
103
Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the fair values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. Proper accounting treatment by Easton is to report the excess amount as
a gain
104
Thompson Company incurred research and development costs of $100,000 and legal fees of $20,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Thompson record as Patent Amortization Expense in the first year?
$2,000
105
ELO Corporation purchased a patent for $180,000 on September 1, 2010. It had a useful life of 10 years. On January 1, 2012, ELO spent $44,000 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2012?
$40,000
106
Danks Corporation purchased a patent for $900,000 on September 1, 2010. It had a useful life of 10 years. On January 1, 2012, Danks spent $220,000 to successfully defend the patent in a lawsuit. Danks feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2012?
$200,000
107
The general ledger of Vance Corporation as of December 31, 2012, includes the following accounts:
- Copyrights $ 30,000
- Deposits with advertising agency (will be used to promote goodwill) 27,000
- Discount on bonds payable 70,000
- Excess of cost over fair value of identifiable net assets of Acquired subsidiary 440,000
- Trademarks 90,000
In the preparation of Vance's balance sheet as of December 31, 2012, what should be reported as total intangible assets?
$560,000
108
In January, 2008, Findley Corporation purchased a patent for a new consumer product for $960,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2013 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during 2013, assuming amortization is recorded at the end of each year?
$480,000
109
Day Company purchased a patent on January 1, 2012 for $600,000. The patent had a remaining useful life of 10 years at that date. In January of 2013, Day successfully defends the patent at a cost of $270,000, extending the patent’s life to 12/31/24. What amount of amortization expense would Kerr record in 2013?
$67,500
110
On January 2, 2012, Klein Co. bought a trademark from Royce, Inc. for $1,200,000. An independent research company estimated that the remaining useful life of the trademark was 10 years. Its unamortized cost on Royce’s books was $900,000. In Klein’s 2012 income statement, what amount should be reported as amortization expense?
$120,000
111
A company acquires a patent for a drug with a remaining legal and useful life of six years on January 1, 2011 for $2,100,000. The company uses straight-line amortization for patents. On January 2, 2013, a new patent is received for a timed-release version of the same drug. The new patent has a legal and useful life of twenty years. The least amount of amortization that could be recorded in 2013 is
$70,000
112
Blue Sky Company’s 12/31/12 balance sheet reports assets of $7,500,000 and liabilities of $3,000,000. All of Blue Sky’s assets’ book values approximate their fair value, except for land, which has a fair value that is $450,000 greater than its book value. On 12/31/12, Horace Wimp Corporation paid $7,650,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?
$2,700,000
113
Dotel Company’s 12/31/12 balance sheet reports assets of $12,000,000 and liabilities of $5,000,000. All of Dotel’s assets’ book values approximate their fair value, except for land, which has a fair value that is $800,000 greater than its book value. On 12/31/12, Egbert Corporation paid $12,200,000 to acquire Dotel. What amount of goodwill should Egbert record as a result of this purchase?
$4,400,000
