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Problem 02-71 (LO 02-4) (Algo)

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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 $450,000. Ingrid allocated $75,000 of the purchase price to goodwill. Ingrids business reports its taxable income on a calendar-year basis. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

Problem 02-71 Part a (Algo)

a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3?

	Deductible Amortization Expense
year 1
year 2
year 3

b. In lieu of the original facts, assume that Ingrid purchased only a phone list with a useful life of five years for $22,500. How much amortization expense on the phone list can Ingrid deduct in year 1, year 2, and year 3?

	Phone LIst
Year 1 Amortization expense
Year 2 Amortization Expense
Year 3 Amortization Expense