Suppose the chester company begins to compete through good designs, high awareness and easy accessibility for their existing pro
1 answer:
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Answer: 1. Goodwill
2. a. Record no entry in the books
b. Record a loss in the books
Explanation:
1. The Special asset created by Heartland Telecom's acquisition of Surety Wireless is Goodwill.
Goodwill is the difference between what the company was worth and what it was purchased for if the purchase price was higher than the worth (market value).
2. a. Goodwill should be accounted for by recoding it in the Long term Assets under Intangible Assets in the balance sheet. It should not be amotrized. If Goodwill increases, there should be no recording this <u>gain</u> on the books.
b. If the value of the asset has decreased, Heartland should record a loss in the books to represent the loss on this account.
