Assume That Bethany Acquires a Competitor's Assets on March 31

question 61

Multiple Choice

Assume that Bethany acquires a competitor's assets on March 31 ^st. The purchase price was $150,000. Of that amount, $125,000 is allocated to tangible assets and $25,000 is allocated to goodwill (a §197 intangible asset) . What is Bethany's amortization deduction for the current year? (Round final answer to the nearest whole number.)

• A)$0
• B)$1,250
• C)$1,319
• D)$1,389
• E)None of the choices are correct.

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Definitions:

Monopolistic Competitor

A firm operating in a monopolistic competition market, selling a product that is differentiated from those of competitors.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial gain that exceeds opportunity costs.

Perfect Competitor

A firm in a perfectly competitive market, having no control over market price and where goods offered are perfect substitutes.

Differentiated Product

A product that has been designed or marketed to stand out from similar products offered by competitors.