Reference no: EM132975

Question :

Amortization of Intangibles. On January 1 of the existing year, Palm Corporation purchases the total assets of Vicki's unincorporated business for $600,000. The tangible total assets have a $300,000 book value and a $400,000 FMV. The purchase agreement states that Vicki can't compete with Palm Corporation by starting a new business in the similar area for a period of five years. The stated consideration received by Vicki for the covenant not to compete is $50,000. Other intangible assets included in the purchase agreement are as given: Goodwill: $70,000 Patents (12-year remaining legal life): $30,000 Customer list: $50,000 a) how could Vicki's assets be recorded for tax purposes by Palm Corporation? b) What is the amortization amount for every intangible asset in the existing year?