On January 2, 2017, Fran Acquires a Business from Chuck

question 38

Multiple Choice

On January 2, 2017, 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 2017?

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

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Definitions:

Personal Preferences

Individual choices or inclinations towards certain options, based on personal likes or dislikes.

Physical Settings

The tangible or environmental surroundings in which individuals or organizations operate, which can influence behavior and operations.

Major Beliefs

Fundamental convictions or principles held by an individual or group, often shaping their worldview and behavior.

Visible Attributes

Characteristics or features of an individual or object that are easily seen or noticed by others.