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	$	41,800
Goodwill		42,800

Dynamos financial condition just prior to the acquisition of these assets is shown in Required B.

Required

1. Compute the annual amortization expense for these items.

2. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model.

Required A Required B Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. (In the Cash Floi operating activities, FA for financing activities, or IA for investing activity. Leave the cell blank if there is no effect. Enter any decreases to account all cells will require entry.) DYNAMO MANUFACTURING Horizontal Statements Model Balance Sheet Income Statement Event Assets Statement of Cash Flows = Liabilities + Equity Revenue Net Income Expense = Cash + Patent + Goodwill 90,700 + + = + 90,700 + + = = Acquisition Amortization + + + + + =