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	$39,300
Goodwill	44,000

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

Compute the annual amortization expense for these items.

Amortization expense

per year

DYNAMO MANUFACTURING

Horizontal Statements Model

Event

Balance Sheet

Income Statement

Statement of Cash Flows

Assets

=

Liabilities

+

Stockholders' Equity

Revenue

Expenses

=

Net Income

Cash

+

Patent

+

Goodwill

Beginning balances

89,600

+

+

=

+

89,600

=

Acquisition

+

+

=

+

=

Amortization

+

+

=

+

=