Indicate whether each of the following statements is true or false.a)Plant assets are classified as long-term assets, while intangible assets are treated as current assets.b)Intangible assets include patents, copyrights, and natural resources.c)Intangible assets with indefinite useful lives will be not be amortized.d)The cost of land should be depleted over its useful life.

Question

Quizplus · Accepted Answer

b)False c)True d)True e)Fa)This is false. The transaction will increase assets by $730,000 (the fair value of the assets on Ernie's books plus the goodwill).b)This is false. Liabilities will increase on Ernie's books by their carrying amount from Bert's books.c)This is true. Goodwill = Price paid of $480,000 + Liabilities assumed of $250,000 − Fair value of assets acquired of $630,000 = $100,000d)This is true. Goodwill is an intangible asset that does not have an identifiable life.e)This is false. Goodwill is not amortized but is tested annually for impairment.

Indicate Whether Each of the Following Statements Is True or False.a)Plant