Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets purchased were the following items.

Patent with 5 remaining years of legal life ......$36,000

Goodwill ................... 40,000

Texas's financial condition just prior to the purchase of these assets is shown in the following statements model:

Required
a. Compute the annual amortization expense for these items if applicable.
b. Record the purchase of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the precedingone.

Transcribed Image Text:

Assets Liab. + Equity Rev. - Exp - Net Inc.|| Cash Flow Cash Patent + Goodwill 94,000 NA NA NA + 94,00011 NA-NA NA NA