LO 9AssetsCash + Patent +94,000ΝΑ++Exercise 8-20A Computing and recording the amortization of intangiblesTexas Manufacturing paid cash to purchase the assets of an existing company. Among the assetspurchased were the following items:GoodwillΝΑTexas's financial condition just prior to the purchase of these assets is shown in the followingstatements model:=Patent with 5 remaining years of legal lifeGoodwillLiab.ΝΑEquity Rev.+ 94,000ΝΑExp.$36,00040,000ΝΑ= Net Inc.=ΝΑCash FlowΝΑRequireda. 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 1in a horizontal statements model like the preceding one.c. Prepare the journal entries to record the purchase of the intangible assets and the relatedamortization for year 1.

Amortization is the non-cash expense which is reported on the intangible assets. It is recorded in…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required: 1. Calculate the impairment loss of goodwill (if any). 2. Record the appropriate journal entry.
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