On June 1, 2017, Red Corporation Purchased an Existing Business

question 55

Multiple Choice

On June 1, 2017, Red Corporation purchased an existing business. With respect to the acquired assets of the business, Red allocated $300,000 of the purchase price to a patent. The patent will expire in 20 years. Determine the total amount that Red may amortize for 2017 for the patent.

• A)$0
• B)$1,667
• C)$11,667
• D)$35,000
• E)None of the above

---

Definitions:

Suppliers

Entities or individuals that provide goods or services to another entity, typically in a commercial transaction.

Income Tax Expense

The amount of money a company owes in taxes based on its taxable income for a given period.

Income Taxes Payable

Represents the amount of taxes on income that a company owes to the government but has not yet paid.

Accounts Payable

Short-term financial obligations to suppliers or creditors for goods and services received but not yet paid for.