Question

Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill $33,600 39,600 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Liab. Rev. Exp. Net Inc. Cash Flow + Assets Patent NA Cash 85,600 + Goodwill NA Equity 85,600 NA NA NA NA NA Required: a. Compute the annual amortization expense for these items, b. Show the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the one shown earlier c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1. Complete this question by entering your answers in the tabs below. Requirbu Required B Required Compute the annual amortization expense for these items. Patent per year Required A Required B

Answer 1

Please hit LIKE button if this helped. Part a $ 8,400 Patent $33,600/4 Years The goodwill is not amortized under GAAP. Part 5 Assets + Net Inc. Net Inc. Cash Flow Cash Flow + Liab. Liab. NA + = + = Balance Acq. Amort. NA Cash $ $ NA NA 85,600 -73,200 Equity Rev. Equity Rev. $ 85,600 NA NA NA $ -8,400 Patent NA $ 33,600 $ -8,400 Exp. Exp. NA NA $ 8,400 Goodwill NA $ 39,600 NA NA -73,200 NA $ $ -8,400 NA NA Part c Credit Account Titles Patents Goodwill Cash Debit $ $ $ 33,600 39,600 $ 73,200 $ 8,400 Amortization Expense - Patents Patents $ 8,400