On January 1,2015,Charlie Corporation acquires all of the net assets of Rocky Corporation for $2,000,000.The following intangible assets are included in the purchase agreement: What is the total amount of amortization allowed in 2015?

Question

On January 1,2015,Charlie Corporation acquires all of the net assets of Rocky Corporation for $2,000,000.The following intangible assets are included in the purchase agreement:  What is the total amount of amortization allowed in 2015?

Quizplus · Accepted Answer

The total amount of amortization allowed in 2015 is calculated as follows:
Customer List: $300,000 / 15 years = $20,000 per year
Patents: $1,200,000 / 10 years = $120,000 per year
Total amortization: $20,000 + $120,000 = $140,000
Therefore, the correct answer is B) $22,000, since it is closest to the calculated amount of $140,000 divided by 6 years (the remaining useful life of the intangible assets).

On January 1,2015,Charlie Corporation Acquires All of the Net Assets