Mini Corp Acquires a Patent from Maxi Co

question 24

Multiple Choice

Mini Corp. acquires a patent from Maxi Co. in exchange for 2,500 shares of Mini Corp.'s $5 par value common stock and $95,000 cash. When the patent was initially issued to Maxi Co., Mini Corp.'s stock was selling at $7.50 per share. When Mini Corp. acquired the patent, its stock was selling for $9 a share. Mini Corp. should record the patent at what amount?

• A) $107,500
• B) $113,750
• C) $117,500
• D) $95,000

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Definitions:

Layoff Cost

Expenses incurred by an organization due to the termination of employees, including severance pay and benefits continuation.

Hiring And Training Cost

The expenses associated with recruiting, hiring, and training new employees.

Regular Time Cost

The cost associated with labor during normal working hours, excluding overtime or premium pay rates.

Over Time Cost

Expenses incurred from workers working beyond their standard hours, often paid at a higher rate.