On January 1,2014,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 2014?
A)$15,000
B)$22,000
C)$31,000
D)$38,000

Question

On January 1,2014,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 2014?
A)$15,000 
B)$22,000 
C)$31,000 
D)$38,000

Quizplus · Accepted Answer

The total amount of intangible assets is $330,000 ($200,000 + $70,000 + $60,000). Assuming a useful life of 15 years, the annual amortization expense would be $22,000 ($330,000/15). Therefore, B is the correct answer.

On January 1,2014,Charlie Corporation Acquires All of the Net Assets