Hubert purchases Fran's jewelry store for $950,000.The identifiable assets of the business are as follows:

Basis
FMV
Inventory
$ 90,000
$ 97,000
Accounts receivable
55,000
50,000
Building
100,000
225,000
Land
280,000
300,000
Hubert and Fran agree to assign $110,000 to a 7-year covenant not to compete.How should Hubert allocate the $950,000 purchase price to the assets?

Question

Hubert purchases Fran's jewelry store for $950,000.The identifiable assets of the business are as follows:
​
Basis
FMV
Inventory
$ 90,000
$ 97,000
Accounts receivable
55,000
50,000
Building
100,000
225,000
Land
280,000
300,000
Hubert and Fran agree to assign $110,000 to a 7-year covenant not to compete.How should Hubert allocate the $950,000 purchase price to the assets?

Quizplus · Accepted Answer

The Answer of Hubert purchases Fran's jewelry store for $950,000.The identifiable assets of the business are as follows:
​
Basis
FMV
Inventory
$ 90,000
$ 97,000
Accounts receivable
55,000
50,000
Building
100,000
225,000
Land
280,000
300,000
Hubert and Fran agree to assign $110,000 to a 7-year covenant not to compete.How should Hubert allocate the $950,000 purchase price to the assets?

Hubert Purchases Fran's Jewelry Store for $950,000