A-2 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 lifeGoodwill$40,20040,900Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model.Balance SheetAssetsCash + Patent +94,900 +ΝΑ+RequiredGoodwillΝΑStockholders'= Liabilities + Equity=ΝΑ+94,900RevenueΝΑIncome Statement-ExpensesΝΑ=NetIncomeΝΑStatementof CashFlowsΝΑa. 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.c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.

ANSWERPatent value = $40,200Goodwill = $40900Useful life of patent = 4 yearsAmortization of…

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 $40,200 40,900 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Assets Cash + Patent + 94,900 + ΝΑ + Required Goodwill = Liabilities + ΝΑ = ΝΑ Stockholders' Equity + 94,900 Revenue ΝΑ - Expenses ΝΑ = Net Income ΝΑ Statement of Cash Flows ΝΑ 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. c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.

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 $40,200 40,900 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Assets Cash + Patent + 94,900 + ΝΑ + Required Goodwill = Liabilities + ΝΑ = ΝΑ Stockholders' Equity + 94,900 Revenue ΝΑ - Expenses ΝΑ = Net Income ΝΑ Statement of Cash Flows ΝΑ 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. c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions

Section: Chapter Questions

Problem 38P

See similar textbooks

Similar questions

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 $32,200Goodwill 43,700Dynamo’s financial condition just prior to the acquisition of these assets is shown in the following statements model.Balance Sheet Income StatementAssets= Liabilities +Stockholders’Equity Revenue − Expenses = Net IncomeStatementof CashCash Flows + Patent + Goodwill92,000 + NA + NA = NA + 92,000 NA − NA = NA NA Requireda. 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.c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year
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 $32,200Goodwill 43,700Dynamo’s financial condition just prior to the acquisition of these assets is shown in the following statements model.Balance Sheet Income StatementAssets= Liabilities +Stockholders’Equity Revenue − Expenses = Net IncomeStatementof CashCash Flows + Patent + Goodwill92,000 + NA + NA = NA + 92,000 NA − NA = NA NARequireda. 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.c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year
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 Required: a. Compute the annual amortization expense for these items. $ 39,800 44,000 b. Record the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Enter any decreases to outflows with a minus sign. Not all cells require input. Round final answers to the nearest whole dollar amount. DYNAMO MANUFACTURING Horizontal Statements Model Balance Sheet Income Statement…
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 $ 31,000 Goodwill 42,000 Dynamo’s financial condition just prior to the acquisition of these assets is shown in Required B. Required Compute the annual amortization expense for these items. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model.
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 Dynamo's financial condition just prior to the acquisition of these assets is shown in Required B. Required a. Compute the annual amortization expense for these items. b. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. (In the Cash Flo operating activities, FA for financing activities, or IA for investing activity. Leave the cell blank if there is no effect. Enter any decreases to accoun all cells will require entry.) Event Acquisition Amortization Cash + 86,400 + + + Balance Sheet Assets Patent + Goodwill $…
Having an issue with this problem. Thank you
5
T2.
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 $38,600 Goodwill 36,100 Dynamo’s financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Assets = Liabilities + Stockholders’ Equity Revenue − Expenses = Net Income Statement of Cash Flows Cash + Patent + Goodwill 92,500 + NA + NA = NA + 92,500 NA − NA = NA NA Required Compute the annual amortization expense for these items. Show the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.
PLEASE EXPLAIN THE ANSWER STEP BY STEP. THANK U.
provide right answer
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances: Akron ToledoSales . . . . . . .. $1,100,000 $600,000Cost of goods sold 500,000 400,000Operating expenses 400,000 220,000Investment income . . Not given –0–Dividends declared . . .80,000 30,000 Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018.a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?b. Prepare a consolidated income statement for the year ending December 31, 2018.