Hubert and fran agree to assign 125000 to a five-year, Ask an Expert

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Hubert purchases Fran's jewelry store for $975,000. The identifiable assets of the business are as follows:

Basis
FMV
Inventory
$125,000
$150,000
Accounts receivable
55,000
50,000
Building
200,000
275,000
Land
280,000
300,000
Hubert and Fran agree to assign $125,000 to a five-year covenant not to compete. How should Hubert allocate the $975,000 purchase price to the assets?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M984354

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