HW6.3 Help Save & Exit Submit Saved You skipped this question in the previous at

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HW6.3 Help Save & Exit Submit Saved You skipped this question in the previous attempt. 2 Check my work 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 life Goodwil1 35,300 37,200 ints Skipped Required eBooka. Compute the annual amortization expense for these items. Hint ferences b. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model shown below

Explanation / Answer

a.computing amortization expense for the given items.

Patents = cost / life

=>$35,300 / 4

=>$8,825.

Goodwill is not subject to amortisation here.

required b.

total cash outflow due to purchase of patent and good will = 35300 + 37200 =>72,500.

This wil be cash outflow due to investing activities.

Patent amortisation will not result in cash outflow.

event cash + patent + goodwill = liabilities + equity Revenue - expense = net income statement of cash flows acquisition -72,500 35,300 37,200 nil nil nil nil nil - 72,500 (IA) patent amortisation nil - 8,825 nil nil -8,825 nil -8,825 -8,825 nil

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