1. On January 1 of the current year Palm Corporation purchasesthe net assets of

1. On January 1 of the current year Palm Corporation purchasesthe net assets of Vickis unincorporated business for $600000. Thetangible net assets have a $300000 book value and a $400000 FMV.The purchase agreement states that Vicki will not compete with PalmCorporation by starting a new business in the same area for aperiod of five years. The stated consideration received by Vickifor the covenant not to compete is $50000. Other intangible assetsincluded in the purchase agreement are as follows: