6. Research and development costs A) are classified as intangible assets B) must

Question

6. Research and development costs A) are classified as intangible assets B) must be expensed when incurred under generalily accepted accounting principles C) should be included in the cost of the patent they relate to. D) are capitalized and then amortized over a period not to exceed 20 years 7, Retro Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Retro issues 6,000 shares of preferred stock for land with an asking price of $750,000 and a market value of $860,000, which of the following would be the best journal entry for Retro to record? 600,000 660,000 750,000 A) Land 600,000 Preferred Stock Preferred Stock Preferred Stock B) Land 660,000 C) Land 600,000 150,000 Paid-in Capital in Excess of Par Preferred D) Land 660,000 Preferred Stock 600,000 60,000 Paid-in Capital in Excess of Par- Preferred 8. All leases are classified as either A) capital leases or long-term leases. B) capital leases or operating leases C) operating leases or current leases D) long-term leases or current leases. 9. The interest charged on a $200,000 note payable, at the rate of 6%, on a 90-day note would be A) $12,000. B) $6,000 C) $3,000. D) $1,000.

Explanation / Answer

6. Option b

Must be expensed when incurred under GAPP.

Explanation:

GAPP require that most research and development costs be expensed in the current period.

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