On January 2, 2012, Fran Acquires a Business from Chuck

question 12

Multiple Choice

On January 2, 2012, 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 2012?

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

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Definitions:

Frontal Lobe

The part of the brain located behind the forehead that is involved in complex cognitive functions, such as behavior, emotions, and problem solving.

Voluntary Motor Function

The aspect of motor control that involves the conscious movement of muscles in response to a desire to perform a specific action.

Insula

A region of the brain's cerebral cortex, buried deep within the lateral sulcus, involved in consciousness, emotion, and the perception of bodily states.

Cerebrum

The largest part of the human brain, responsible for voluntary movements, sensory perception, learning, memory, and other higher cognitive functions.