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Could anyone help me?
It is really confusing.
Question below:
*Using direct method only
My teacher said the answer to the 9th question is 71,000-58,000=13,000(Purchase of fixed assets), but the sold of the patent also should be considered into investing activities.The answer is still 13,000 because the amortization expense is 1,100 and the sold of the patent is the same as the amortization expense.
so it supposed to be 71,000-58,000(purchase of fixed assets )-1,100(patent)+1,100 (amortization) = 13,000
My teacher also said if we move the amortization expenses, it should be 71,000 - 58,000 -1,100.
So now I have a question here.As I know, the amortization expenses supposed to show up only in Indirect method, so why we still take amortization into account?Is it because of the patent? Or once we see intangible assets on long-term assets, we have to consider adding or deducting the amortization expenses into investing activities?
If it is really so, how about depreciation?Because the depreciation is same as the amortization, but depreciation is for equipment and only appear when we use the indirect method.Do we still need to consider it like amortization?
Thank you for your time.
I really appreciate it if you could help me.
It is really confusing.Question below:
*Using direct method only
My teacher said the answer to the 9th question is 71,000-58,000=13,000(Purchase of fixed assets), but the sold of the patent also should be considered into investing activities.The answer is still 13,000 because the amortization expense is 1,100 and the sold of the patent is the same as the amortization expense.
so it supposed to be 71,000-58,000(purchase of fixed assets )-1,100(patent)+1,100 (amortization) = 13,000
My teacher also said if we move the amortization expenses, it should be 71,000 - 58,000 -1,100.
So now I have a question here.As I know, the amortization expenses supposed to show up only in Indirect method, so why we still take amortization into account?Is it because of the patent? Or once we see intangible assets on long-term assets, we have to consider adding or deducting the amortization expenses into investing activities?
If it is really so, how about depreciation?Because the depreciation is same as the amortization, but depreciation is for equipment and only appear when we use the indirect method.Do we still need to consider it like amortization?
Thank you for your time.
I really appreciate it if you could help me.
