On January 2, 2018, Fran Acquires a Business from Chuck

question 59

Multiple Choice

On January 2, 2018, 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 2018?

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

Understand how the financial markets facilitate the flow of money between the consumption and production sectors.

Analyze the relationship between expected inflation, real interest rate, and nominal interest rate.

Understand the process of solving quadratic equations by completing the square.

Solve quadratic equations using the quadratic formula.

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Definitions:

Manufacturing Overhead

Indirect costs related to manufacturing, such as utilities, maintenance, and salaries for managers, not directly involved in production.

Variable Manufacturing Overhead

Costs in the production process that vary with the level of output, such as utilities for machinery.

Fixed Manufacturing Overhead

The total of all costs that remain constant regardless of the level of production or sales, in the context of manufacturing operations.

Direct Labor-Hours

The total number of hours worked by employees directly involved in the manufacturing process.