On June 1, 2012, Red Corporation Purchased an Existing Business

question 100

Multiple Choice

On June 1, 2012, 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 2012 for the patent.

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

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Definitions:

Utility Function

A mathematical representation of how a consumer derives satisfaction from consuming different quantities of goods and services.

Optimum Point

The most advantageous position or condition that can be achieved in a given circumstance or under certain parameters.

Frozen Yogurt

A dessert made from yogurt and sometimes other dairy products that is frozen and has a taste and texture similar to ice cream.

Indifference Map

A graphical representation of different bundles of goods between which a consumer is indifferent.