On June 1,2014,Red Corporation purchased an existing business.With respect to the acquired assets of the business,Red allocated $300,000 of the purchase price to a patent.The patent will expire in 20 years.Determine the total amount that Red may amortize for 2014 for the patent.
A)$0
B)$1,667
C)$11,667
D)$35,000
E)None of these

Question

Quizplus · Accepted Answer

$300,000 × (7 months/180 months)= $11,667.The statutory amortization period for § 197 intangibles is 15 years.

On June 1,2014,Red Corporation Purchased an Existing Business