On January 2, 2014, Fran Acquires a Business from Chuck

question 119

Multiple Choice

On January 2, 2014, Fran acquires a business from Chuck. Among the assets purchased are the following intangibles: patent with a 7-year remaining life, a covenant not to compete for 10 years, and goodwill.
Of the purchase price, $140,000 was paid for the patent and $60,000 for the covenant. The amount of the excess of the purchase price over the identifiable assets was $100,000. What is the amount of the amortization deduction for 2014?

• A) $10,667.
• B) $16,000.
• C) $20,000.
• D) $32,667.
• E) None of the above.

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