Stellar Corporation purchased all of the assets of Bellavia Company as of January 1 this year for $1 million. Included in the assets acquired are the following intangible assets:
$$\begin{array} { | l | l | r | }
\hline \text { Asset } & \text { Useful Life } & \text { Cost } \
\hline \text { Patent } & 10 \text { year } & \$ 120,000 \
\hline \text { Covenant not to complete } & 3 \text { years } & 30,000 \
\hline \text { Goodwill } & \text { Indefinite } & 300,000 \
\hline
\end{array}$$ What is Stellar's maximum amortization deduction for the year?

Question

Stellar Corporation purchased all of the assets of Bellavia Company as of January 1 this year for $1 million. Included in the assets acquired are the following intangible assets:
 $$\begin{array} { | l | l | r | } 
\hline \text { Asset } & \text { Useful Life } & \text { Cost } \
\hline \text { Patent } & 10 \text { year } & \$ 120,000 \
\hline \text { Covenant not to complete } & 3 \text { years } & 30,000 \
\hline \text { Goodwill } & \text { Indefinite } & 300,000 \
\hline
\end{array}$$ What is Stellar's maximum amortization deduction for the year?

Quizplus · Accepted Answer

The Answer of Stellar Corporation purchased all of the assets of Bellavia Company as of January 1 this year for $1 million. Included in the assets acquired are the following intangible assets:
 $$\begin{array} { | l | l | r | } 
\hline \text { Asset } & \text { Useful Life } & \text { Cost } \
\hline \text { Patent } & 10 \text { year } & \$ 120,000 \
\hline \text { Covenant not to complete } & 3 \text { years } & 30,000 \
\hline \text { Goodwill } & \text { Indefinite } & 300,000 \
\hline
\end{array}$$ What is Stellar's maximum amortization deduction for the year?

Stellar Corporation Purchased All of the Assets of Bellavia Company