Assets Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets purchased were the following items: + Cash + Patent + Goodwill 94,000 + ΝΑ ΝΑ Texas's financial condition just prior to the purchase of these assets is shown in the following statements model: = Patent with 5 remaining years of legal life Goodwill = Liab. + Equity ΝΑ Rev. + 94,000 ΝΑ Exp. $36,000 40,000 ΝΑ = Net Inc. NA Cash Flow NA Required a. Compute the annual amortization expense for these items if applicable. b. Record the purchase of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the preceding one. e. Prepare the journal entries to record the purchase of the intangible assets and the related amortization for year 1.
Assets Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets purchased were the following items: + Cash + Patent + Goodwill 94,000 + ΝΑ ΝΑ Texas's financial condition just prior to the purchase of these assets is shown in the following statements model: = Patent with 5 remaining years of legal life Goodwill = Liab. + Equity ΝΑ Rev. + 94,000 ΝΑ Exp. $36,000 40,000 ΝΑ = Net Inc. NA Cash Flow NA Required a. Compute the annual amortization expense for these items if applicable. b. Record the purchase of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the preceding one. e. Prepare the journal entries to record the purchase of the intangible assets and the related amortization for year 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![LO 9
Assets
Cash + Patent +
94,000
ΝΑ
+
+
Exercise 8-20A Computing and recording the amortization of intangibles
Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets
purchased were the following items:
Goodwill
ΝΑ
Texas's financial condition just prior to the purchase of these assets is shown in the following
statements model:
=
Patent with 5 remaining years of legal life
Goodwill
Liab.
ΝΑ
Equity Rev.
+ 94,000
ΝΑ
Exp.
$36,000
40,000
ΝΑ
= Net Inc.
=
ΝΑ
Cash Flow
ΝΑ
Required
a. Compute the annual amortization expense for these items if applicable.
b. Record the purchase of the intangible assets and the related amortization expense for year 1
in a horizontal statements model like the preceding one.
c. Prepare the journal entries to record the purchase of the intangible assets and the related
amortization for year 1.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5c3a1c5-1e05-435e-96c4-f1ffe409d4ec%2Ff77bf1f4-ccfb-4b7f-996c-3f1e5c09b31a%2Fvumv1j8_processed.png&w=3840&q=75)
Transcribed Image Text:LO 9
Assets
Cash + Patent +
94,000
ΝΑ
+
+
Exercise 8-20A Computing and recording the amortization of intangibles
Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets
purchased were the following items:
Goodwill
ΝΑ
Texas's financial condition just prior to the purchase of these assets is shown in the following
statements model:
=
Patent with 5 remaining years of legal life
Goodwill
Liab.
ΝΑ
Equity Rev.
+ 94,000
ΝΑ
Exp.
$36,000
40,000
ΝΑ
= Net Inc.
=
ΝΑ
Cash Flow
ΝΑ
Required
a. Compute the annual amortization expense for these items if applicable.
b. Record the purchase of the intangible assets and the related amortization expense for year 1
in a horizontal statements model like the preceding one.
c. Prepare the journal entries to record the purchase of the intangible assets and the related
amortization for year 1.
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