Amortization of Intangibles and Effects on Statement of Cash Flows Tableleaf Inc. purchased a patent a number
Question:
Amortization of Intangibles and Effects on Statement of Cash Flows Tableleaf Inc. purchased a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheets as of December 31, 2010 and 2009, included the following line item:
12/31/10 12/31/09 Patent, less accumulated amortization of
$119,000 (2010) and $102,000 (2009) $170,000 $187,000 Required 1. How much amortization expense was recorded during 2010?
2. What was the patent’s acquisition cost? When was it acquired? What is its estimated useful life? How was the acquisition of the patent reported on that year’s statement of cash fl ows?
3. Assume that Tableleaf uses the indirect method to prepare its statement of cash fl ows. How is the amortization of the patent reported annually on the statement of cash fl ows?
4. How would the sale of the patent on January 1, 2011, for $200,000 be reported on the 2011 statement of cash fl ows?
AppendixLO1
Step by Step Answer:
Using Financial Accounting Information The Alternative To Debits And Credits
ISBN: 9780538452748
7th Edition
Authors: Curtis L. Norton, Gary A. Porter