Question 5: Understand how amortization affects a company's financial statements 21st Century Farms Inc. is a high-tech farming operation that has successfully patented methods for quick and efficient farming 365 days a year in all kinds of weather. As their accountant, you have been asked to prepare a partial balance sheet for their fixed assets for the year ended December 31, 2016. Their books currently show the following information: Account Amount as of December 31, 2016 Buildings $1,080,000 Goodwill 420.000 Patents 600.000 Farm Equipment 390,000 Accumulated Amortization, Buildings 670,000 Accumulated Amortization, Farm 275,000 Equipment Accumulated Amortization, Patents 120,000 Q5.1 Provide your answers in the balance sheet table found below. When finished, Isave the document and submit it for evaluation along with all of the documents from the other tasks in this assessment. Q5.1 Provide your answers in the balance sheet table found below. When finished, save the document and submit it for evaluation along with all of the documents from the other tasks in this assessment. 21st Century Farms Inc. Balance Sheet A.Current Assets (Most Liquid): Cash Account Recv December 31, 2016 $20,000 $45,000 Inventory $35,000 Total Current Assets $100,000 Fixed Assets (Long Term Capital Assets) Farm Equipment (FE) Accumulated Depreciation - FE $ Building (B) $ Accumulated Depreciation - B Patents (P) $ Accumulated Depreciation - P Goodwill $ Total Fixed Assets $1,425,000 A.Total Assets $1,525,000 B.Current Liabilities (Most Current): Account Payable $107,000 Notes $5,000 Total Current Liabilities $112,000 Long Term Liabilities: Mortgage $100,000 Bank Loans $25,000 Total Current Liabilities $125,000 B.Total Liabilities $237,000 C.Owners Equity: Common Stock Retained Eamings Treasury Stock $1,188,000 $125,000 $25,000 $1,288,000 Total Liabilities and Shareholders Equity Q5.2: Evaluate the amortisation expenses for the intangible assets of Goodwill and Patents. First determine the capitalised costs of both assets, then apply the useful life (10 years) to determine the amortisation expenses. Q5.3: Evaluate the depreciation expenses for the tangible assets of Farm Equipment and Buildings using the straight line method. First determine the book value of both these assets when they were purchased, then apply the useful life (15 years) to determine the depreciation expense of both. Q5.4: Make the Journal entries for (depreciation expenses) the tangible assets of Farm Equipment and Buildings and the (amortization expenses) for the intangible assets of Goodwill and Patents (Note, record these expenses as one journal entry for the entire year booked on December 31).