On January 2,2015,Fran Acquires a Business from Chuck

question 65

Multiple Choice

On January 2,2015,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 2015?

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

---

Definitions:

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied changes infinitely in response to any change in price, represented by a horizontal demand or supply curve.

Industry Supply

The total output of a specific good or service produced by all firms in an industry at various price levels.

Industry Demand

The total demand for all the goods or services produced by a particular market sector.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied responds infinitely or by unlimited quantity to any change in price, represented graphically as a horizontal line.