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 $35,500

Goodwill 40,600

Dynamo's 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.

Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. (In the Cash F operating activities, FA for financing activities, or IA for investing activity. Leave the cell blank if there is no effect. Enter any decreases to accol all cells will require entry.) DYNAMO MANUFACTURING Horizontal Statements Model Balance Sheet Income Statement Statement of Cash Event Assets = Liabilities + Equity Revenue - Expense = Net Flows Cash + Patent + Goodwill Income 92,000 + + + 92,000 Acquisition Amortization