On May 1,Sessi Inc.,a calendar year corporation,purchased a business for a $2 million lump-sum price.The business' balance sheet assets had the following appraised FMV. a.Compute the cost basis of the goodwill acquired by Sessi Inc.on the purchase of this business.
b.Compute Sessi's goodwill amortization deduction for the year of purchase.
c.Use a 35 percent tax rate to compute Sessi's deferred tax liability resulting from the amortization deduction.

Question

On May 1,Sessi Inc.,a calendar year corporation,purchased a business for a $2 million lump-sum price.The business' balance sheet assets had the following appraised FMV.   a.Compute the cost basis of the goodwill acquired by Sessi Inc.on the purchase of this business.
b.Compute Sessi's goodwill amortization deduction for the year of purchase.
c.Use a 35 percent tax rate to compute Sessi's deferred tax liability resulting from the amortization deduction.

Quizplus · Accepted Answer

The Answer of On May 1,Sessi Inc.,a calendar year corporation,purchased a business for a $2 million lump-sum price.The business' balance sheet assets had the following appraised FMV.   a.Compute the cost basis of the goodwill acquired by Sessi Inc.on the purchase of this business.
b.Compute Sessi's goodwill amortization deduction for the year of purchase.
c.Use a 35 percent tax rate to compute Sessi's deferred tax liability resulting from the amortization deduction.