At the beginning of the year,Big Time Tires acquired 100% of the common stock of Discount Tires.The purchase price allocation included the following items: $800,000,patent;$300,000,trademark considered to have an indefinite useful life;and $2 million,goodwill.Big Time Tire's policy is to amortize intangible assets with finite useful lives using the straight-line method,no residual value,and a five-year service life.What is the total amount of amortization expense that would appear in Big Time Tire's income statement for the first year related to these items?

Question

Quizplus · Accepted Answer

The Answer of At the beginning of the year,Big Time Tires acquired 100% of the common stock of Discount Tires.The purchase price allocation included the following items: $800,000,patent;$300,000,trademark considered to have an indefinite useful life;and $2 million,goodwill.Big Time Tire's policy is to amortize intangible assets with finite useful lives using the straight-line method,no residual value,and a five-year service life.What is the total amount of amortization expense that would appear in Big Time Tire's income statement for the first year related to these items?

At the Beginning of the Year,Big Time Tires Acquired 100