Tableleaf Inc. purchased a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheets as of December 31, 2017 and 2016, included the following line item: 12/31/17 12/31/16 Patent, less accumulated amortization of $119,000 (2017) and $102,000 (2016) $170,000 $187,000 Required: 1. How much amortization expense was recorded during 2017? $fill in the blank 1 2. What was the patent's acquisition cost? $fill in the blank 2 In what year was it acquired? 2011 What is its estimated useful life? fill in the blank 4 years How was the acquisition of the patent reported on that year's statement of cash flows? 3. Assume that Tableleaf uses the indirect method to prepare its statement of cash flows. How is the amortization of the patent reported annually on the statement of cash flows? Assuming the indirect method is used, the amortization expense relating to the patent would be net income in the Cash Flows from Operating Activities section of the statement of cash flows. 4. The sale of the patent on January 1, 2017, for $200,000 will be reported on the 2017 statement of cash flows. What is the amount of the gain/(loss) to be reported for the sale of the patent? $fill in the blank 7
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Tableleaf Inc. purchased a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheets as of December 31, 2017 and 2016, included the following line item:
| 12/31/17 | 12/31/16 | |
| Patent, less accumulated amortization of $119,000 (2017) and $102,000 (2016) |
$170,000 | $187,000 |
Required:
1. How much amortization expense was recorded during 2017?
$fill in the blank 1
2. What was the patent's acquisition cost?
$fill in the blank 2
In what year was it acquired?
2011
What is its estimated useful life?
fill in the blank 4 years
How was the acquisition of the patent reported on that year's statement of
3. Assume that Tableleaf uses the indirect method to prepare its statement of cash flows. How is the amortization of the patent reported annually on the statement of cash flows?
Assuming the indirect method is used, the amortization expense relating to the patent would be net income in the Cash Flows from Operating Activities section of the statement of cash flows.
4. The sale of the patent on January 1, 2017, for $200,000 will be reported on the 2017 statement of cash flows.
What is the amount of the gain/(loss) to be reported for the sale of the patent?
$fill in the blank 7
The gain/(loss) on the sale of the patent would be reported in the statement of cash flows as:
The proceeds from the sale of the patent would be reported in the statement of cash flows as:
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