(c) Penny Company acquires a patent for $2,000,000. The company selling the patent has spent $1,000,000 on the research and development of it. The patent has a remaining economic life of 15 years while the law provides Penny Company a legal life of 20 years.

V. The following information is available for Green Corporation for the year ended December 31, 2018: | Collection of principal on non-current loan to a supplier | $15,000 | | --- | --- | | Acquisition of equipment for cash | 10,000 | | Gain on sale of amortized cost financial assets | 2,000 | | Issuance of ordinary shares for cash | 20,000 | | Depreciation expense | 32,000 | | Interest expense | 10,000 | | Loss on redemption of bonds payable | 5,000 | | Payment of cash dividends | 14,000 | | Net income | 30,000 | | Purchase of land by issuing 3-year notes payable | 40,000 | In addition, the following information is available from the comparative statements of financial position (partial) for Green at the end of 2017 and 2018: | | Dec 31, 2018 | Dec 31, 2017 | | --- | --- | --- | | Cash | $ 87,000 | $ 14,000 | | Accounts receivable (net) | 20,000 | 15,000 | | Prepaid insurance | 17,000 | 13,000 | | Amortized cost financial assets (at par) | 0 | 25,000 | | Accounts payable | $ 20,000 | $ 13,000 | | Salaries and wages payable | 4,000 | 7,000 | | Interest payable | 5,000 | 6,000 | | Bonds payable (issued at par) | 0 | 19,000 | Green Company does not list interests payment as a financing activity. Green Company does not list dividends payment as an operating activity. Instructions 1. Calculate the net cash flows provided by operating activities. (6%)

(c) Penny Company acquires a patent for $2,000,000. The company selling the patent has spent $1,000,000 on the research and development of it. The patent has a remaining economic life of 15 years while the law provides Penny Company a legal life of 20 years.

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