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, 2012 and 2011, included the following line item:
_________________________________________12/31/12 12/31/11
Patent, less accumulated amortization of
$119,000 (2012) and $102,000 (2011)..................$170,000.......$187,000
Required
1. How much amortization expense was recorded during 2012?
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 flows?
3. Assume that Tableleaf uses the indirect method to prepare its statement of cash flows. How is the amortization of the patent reported annually on the statement of cash flows?
4. How would the sale of the patent on January 1, 2013, for $200,000 be reported on the 2013 statement of cash flows?