After several profitable years running her business, Ingrid decided to acquire t

Question

After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $438,000. Ingrid allocated $73,000 of the purchase price to goodwill. Ingrid’s business reports its taxable income on a calendar-year basis

In lieu of the original facts, assume that Ingrid purchased only a phone list with a useful life of 5 years for $21,500. How much amortization expense on the phone list can Ingrid deduct in year 1, year 2, and year

Week 2 Chaptef 9 Hom ,T 2013, Elaine Paid $2.6: x G Solvec: Dains Diamond x Connect n C Secure I https://new cor pps Q Andrew Malinsa l QonMusic Contemp connect.htrri i tge ral * QChapter 5 Flashcand D·QB 2015 My QR VewAll Clothing l MCTPrters inc lob- M for Talent Scirn e room 5 trivagncom r Back This window shows your responses and what was marked correct and incorrect from your previous attempt. 30 Required information [The following information applies to the questions displayed below. After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $438,000. Ingrid allocated $73,000 of the purchase price to goodwill. Ingrid's business reports its taxable income on a calendar-year basis. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Part 2 of 3.3/10 points awarded Scored b. In lieu of the original facts, assume that Ingrid purchased only a phone list with a useful life of 5 years for $21,500. How much amortization expense on the phone list can Ingrid deduct in year 1, year 2, and year 3? Phone List Year 1 amortization Year 2 amortization expense Year 3 amortization 2,867 4,300 1.433 > 5 PM /2017

Explanation / Answer

B Answer :-

Ingrid's amortisation for the phone list for year 1 is $ , year 2 and year 3 is $ . Computed as follows :-

Note:- Since Ingrid purchased only the phone list, it is not considered as intangible and will be amortized over its remaining useful life.

Description Phone List (1). Basis of phone list $21,500 (2). Recovery period in months 60 months (3). Monthly amortisation $358.33 (4). Months in year 1 × 8 months (5). Year 1 - Straight line amortisation $2,867 (6). Months in year 2 and year 3 × 12 months (7). Year 2 and year 3, annual straight line amortisation $4,300

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