Garth Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were
Question:
Garth Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items:
Patent with 5 remaining years of legal life ....$48,000
Goodwill .................. 35,000
Garth€™s financial condition just prior to the purchase of these assets is shown in the following statements model:
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Required
a. Compute the annual amortization expense for these items if applicable.
b. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model like the preceding one.
c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
Step by Step Answer:
a Patent 48000 5 9600 per year The goodwill is not amortized b Garth Manufacturing Statements ...View the full answer
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds
