MrAnd MrsCarleton Founded Carleton Industries in 1993

question 61

Multiple Choice

Mr.and Mrs.Carleton founded Carleton Industries in 1993.This year,an independent appraiser placed a $25 million value on Carleton's business; $5 million of the value was attributable to unrecorded goodwill.Which of the following statements is true?

• A)Mr.and Mrs.Carleton are allowed to amortize the $5 million value of their business goodwill over 15 years.
• B)Mr.and Mrs.Carleton have a zero tax basis in their business goodwill.
• C)Mr.and Mrs.Carleton cannot amortize the $5 million value of their business goodwill because it is an intangible asset with an indeterminable life.
• D)None of the above is true.

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Definitions:

Delegation

The process of assigning responsibility and authority to others to carry out specific activities, while retaining overall accountability.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Unanimity

Complete agreement or consensus among all members or parties involved in a particular situation or decision-making process.

Failed Decisions

Decisions that do not achieve their intended outcome, leading to negative consequences or failures to meet specific goals or objectives.