Mitzi's Muffins Ltd

question 29

Multiple Choice

Mitzi's Muffins Ltd. purchased a commercial baking system for $150,000 at the beginning of 20X1. The estimated economic life of the system is 10 years and Mitzi's uses straight-line amortization. At the beginning of 20X3, Delicious Bakeries Ltd. acquired Mitzi's in a business combination.
-At the time of the acquisition, Mitzi's baking system had a fair value of $140,000 and a remaining useful life of eight years. With respect to the baking system, how much amortization expense should Delicious Bakeries report on its consolidated financial statements at the end of 20X3?

• A)$ 2,500
• B)$14,000
• C)$15,000
• D)$17,500

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Definitions:

Structural Steel

Structural steel is a category of steel used in the construction of buildings and structures, renowned for its high strength-to-weight ratio and versatility in forming and welding.

Callout Ø1.25

A notation in technical drawings indicating a circular feature or hole with a diameter of 1.25 units, typically in inches or millimeters.

Round Tubing

Hollow cylindrical materials, often made of metal or plastic, used in structural, fluid conveyance, or mechanical applications.

Structural Steel

A category of steel used for making construction materials in a variety of shapes, known for its high strength-to-weight ratio.