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 $ 31,000 42,000 + + + = = DYNAMO MANUFACTURING Horizontal Statements Model Liabilities + Equity Revenue + 86,400 + + Income Statement Expense = = ||| || = Net Income Statement of Cash Flows IA
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 $ 31,000 42,000 + + + = = DYNAMO MANUFACTURING Horizontal Statements Model Liabilities + Equity Revenue + 86,400 + + Income Statement Expense = = ||| || = Net Income Statement of Cash Flows IA
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 75P
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Question
Transcribed Image Text: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
$ 31,000
42,000
+
+ +
=
=
DYNAMO MANUFACTURING
Horizontal Statements Model
Liabilities + Equity Revenue
+ 86,400
+ +
Income Statement
Expense =
=
||| ||
=
Net
Income
Statement of Cash
Flows
IA
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