Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 6, Problem 19E
a.
To determine
Calculate the annual amortization expense for the given items.
b.
To determine
Show the effect of acquisition of the intangible assets and their related amortization expense for the Year 1 in a horizontal statement model.
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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
$…
provide right answer
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…
Chapter 6 Solutions
Survey Of Accounting
Ch. 6 - 1. What is the difference between the functions of...Ch. 6 - Prob. 2QCh. 6 - Prob. 3QCh. 6 - 4. Define depreciation. What kind of asset...Ch. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - 8. Explain the historical cost concept as it...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - 12. Explain straight-line, units-of-production,...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - 17. What is salvage value?Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - 22. Why would a company choose to depreciate one...Ch. 6 - Prob. 23QCh. 6 - 27. How are capital expenditures made to improve...Ch. 6 - Prob. 25QCh. 6 - Prob. 26QCh. 6 - Prob. 27QCh. 6 - Prob. 28QCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - LO 8-1 Exercise 8-6 A Allocating costs for a...Ch. 6 - Effect of depreciation on the accounting equation...Ch. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Events related to the acquisition, use, and...Ch. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Accounting for acquisition of assets, including a...Ch. 6 - Calculating depreciation expense using three...Ch. 6 - Determining the effect of depreciation expense on...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Revision of estimated salvage value Delta Machine...Ch. 6 - Purchase and use of tangible asset: Three...Ch. 6 - Recording continuing expenditures for plant assets...Ch. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Performing ratio analysis using real-world data...Ch. 6 - Prob. 1ATCCh. 6 - ATC 6-3 Research Assignment Comparing Microsofts...Ch. 6 - Prob. 4ATCCh. 6 - ATC 6-5 Ethical Dilemma Whats an expense? Several...
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- 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.arrow_forwardA primary beneficiary company has established control over a VIE by guaranteeing its long term debt and by establishing an income distribution contract. The balance sheet of the VIE on the acquisition date was as follows: Current assets . . . . . . . . . . . . 100,000 Land and buildings . . . . . . . 600,000 Accumulated depreciation (100,000) Equipment . . . . . . . . . . . . . . . 300,000 Accumulated depreciation . (50,000) Total assets. . . . . . . . . . . . . . . 850,000 Current liabilities . . .. . . . . . . . 70,000 Long term note payable . . 700,000 Common stock, $1 par . . . . . . 5,000 Paid-in excess of par . . . . . .. . 45,000 Retained earnings . . . . . . .. . . 30,000 Total liabilities and equity .. 850,000 The fair values of the land and buildings are $800,000. The fair value of the equipment is $400,000. The fair value of the company’s net (of debt) assets is estimated to be $600,000. Prepare the distribution of excess schedule.arrow_forwardEstimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.arrow_forward
- Balance Sheet Presentation The following information relates to the assets of Westfield Semiconductors as of December 31, 2019. Westfield uses the straight-line method for depreciation and amortization. Required: Use the information above to prepare the property, plant, and equipment and intangible assets portions of a classified balance sheet for Westfield.arrow_forwardUse this information to answer the following 6 questions. Madison Company acquired a depreciable asset at the beginning of Year 1 at a cost of $12 million. At December 31, Year 1, Madison gathered the following information related to this asset: Carrying value of the asset at 12/31/Y1 $10 million Fair value of the asset at 12/31/Y1 $7.5 million Sum of expected future cash flows at 12/31/Y1 $10 million Present value of expected future cash flows at 12/31/Y1 $8 million Remaining useful life at 12/31/Y1 5 years Determine the impact on Year 1 net income from depreciation and possible impairment under IFRS.arrow_forwardHaving an issue with this problem. Thank youarrow_forward
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- Current Attempt in Progress Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the R O amount charged to depreciation expense since the acquisition of the asset. O amount to be deducted from the cost of the asset to arrive at its fair value. O amount charged to depreciation expense in the current period. O cash fund to be used to replace assets. eTextbook and Mediaarrow_forwardpregunta anexa question in imagearrow_forwardWhich of the following is not a required disclosure regarding intangible assets that are amortized for each period a company presents a balance sheet? a. the total costb. the accumulated amortizationc. the amortization expensed. the estimated amortization expense for the next ten yearsarrow_forward
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