Exercise 8-21A (Algo) Computing and recording the amortization of intangibles LO 8-10, 8-11 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 $39,700 41,900 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Cash 85,200 + Assets Patent NA Stockholders' + Goodwill + NA Liabilities + Equity NA 85,200 + Revenue NA Expenses NA = Net Income ΝΑ Statement of Cash Flows ΝΑ Required 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. Complete this question by entering your answers in the tabs below.
Exercise 8-21A (Algo) Computing and recording the amortization of intangibles LO 8-10, 8-11 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 $39,700 41,900 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model. Balance Sheet Income Statement Cash 85,200 + Assets Patent NA Stockholders' + Goodwill + NA Liabilities + Equity NA 85,200 + Revenue NA Expenses NA = Net Income ΝΑ Statement of Cash Flows ΝΑ Required 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. Complete this question by entering your answers in the tabs below.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 62E
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