Assume that Bethany acquires a competitor's assets on March 31ˢᵗ. The purchase price was $150,000. Of that amount, $125,000 is allocated to tangible assets and $25,000 is allocated to goodwill (a §197 intangible asset). What is Bethany's amortization expense for the current year? (Round final answer to the nearest whole number.)
A) $0.
B) $1,250.
C) $1,319.
D) $1,389.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The full-month convention applies. §197 assets have a recovery period of 180 months. The amortization is $1,389 ($25,000/180) × 10.

Assume That Bethany Acquires a Competitor's Assets on March 31ˢᵗ