1. S-Pilot Company incurred the following costs during 2016:
1. S-Pilot Company incurred the following costs during 2016:
| Design of tools, jigs, molds and dies involving new Technology | $250,000 |
| Modification of the formulation of a process | 320,000 |
| Troubleshooting in connection with breakdowns during commercial
production |
200,000 |
| Adaption of an existing capability to a particular customer’s need as
Part of a continuing commercial activity |
220,000 |
In its 2016 income statement, what expense should S-Pilot report for research and development?
2. Alton Inc. purchased equipment for $20,000 on January 1, 2015. The estimated useful life is 5 years and the residual at the end of the five years is $2,000. Alton uses the double-declining balance depreciation method. What will be the carrying value (book value) at December 31, 2017?
3. A Company on January 1, 2017 purchased B Company at a cost that resulted in recognition of goodwill of $300,000. During the first quarter of 2017, A Company spends an additional $120,000 on expenditures designed to maintain goodwill. In its December 31, 2017 balance sheet, what amount should A Company report as goodwill?
4. Assume a corporation has a cash surrender value of $20,000 at the beginning of the year. During the year, a premium of $100,000 is paid, and the cash surrender value at the end of the year is $32,000.
Required: Record the entry for the premium payment.
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