The General Ledger of Vance Corporation as of December 31

question 67

Multiple Choice

The general ledger of Vance Corporation as of December 31, 2007, includes the following accounts: $$\begin{array} { l r } \text { Copyrights } & \$ 20,000 \\\text { Deposits with advertising agency (will be used to promote goodwill) } & 27,000 \\\text { Discount on bonds payable } & 67,500 \\\text { Excess of cost over fair value of identifiable net assets of } & \\\quad \text { Acquired subsidiary } & 390,000 \\\text { Trademarks } & 90,000\end{array}$$ In the preparation of Vance's balance sheet as of December 31, 2007, what should be reported as total intangible assets?

• A)$594,500.
• B)$527,000.
• C)$500,000.
• D)$460,000.

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Definitions:

Investing Activities

Investing activities involve the purchase and sale of long-term assets and other investments, not including cash equivalents, as part of a company’s capital allocation strategy.

Short-term Investments

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business cycle, whichever is longer.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.

Quality of Income Ratio

A measure that compares cash flow from operating activities to net income, indicating the quality of a company's earnings.