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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Students have asked these similar questions
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…
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.
A 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.
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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