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:

Weed Populations

Groups of unwanted plants that compete with cultivated plants for resources, often in agricultural settings or natural environments.

Gene Duplication

A process by which a region of DNA containing a gene is copied within an organism's genome, leading to genetic diversity.

Gallflies

A group of insects known for their ability to induce gall formation on plants, where they then live and feed.

Intermediate Gall Sizes

Refers to the medium range of sizes for galls, which are abnormal growths on plants caused by various organisms.