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SashulF [63]
3 years ago
15

What is goodwill in a business sale and why is it amortized in the business financial statements

Business
1 answer:
astra-53 [7]3 years ago
7 0

Answer:

See below

Explanation:

Goodwill arises when is a business is acquired as a going concern. It is an intangible asset of a business. Goodwill represents the value of a company's customer base, its location, any patents, and the brand name. It consists of the value of suppliers, customers, and employee relationships that facilitates the smooth running of the business.

The value of goodwill is the difference between the purchase price and the net cost of its tangible and other intangible assets of a business. Amortization of goodwill means spreading the cost of goodwill to several financial years.

Goodwill is amortized because the business benefits from the goodwill for many years.  In other words, the expenditure on goodwill will profit the company in more than one financial year. As per the matching principle, expenses and incomes should be recognized in the period they occur. As benefits will be enjoyed in many years, the expenses should also be spread in similar years.

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The Shoe Box is considering adding a new line of winter footwear to its product lineup. When analyzing the viability of this add
Sindrei [870]

Answer:

D)the research and development costs to produce the current winter footwear samples.

Explanation:

Research and development costs associated with the current winter footwear samples will not impact the performance of the proposed new line.

When analyzing the viability of the new product line up, the company should only consider the projected expenses and revenues arising from the project. A project is viable if its benefits outweigh its shortcomings. One way of establishing viability is by doing a cost-benefit analysis.

For the Shoe Box company, the new project line may have some effects on the sales of current products. The new projects will demand new counters. The company must also consider expected revenues and taxes. All these have elements of cost and benefits directly associated with the proposed product line.

7 0
4 years ago
On January 1, Avers Co. borrowed $10,000 by extending their past-due account payable with a a 60-day, 8% interest-bearing note.
babymother [125]

Answer:

Notes payable; $10,000

Explanation:

Given that,

Borrowing amount = $10,000

Time period = 60 day

Interest rate = 8%

On the due date of the note, avers co. paid the amount.

Therefore, this entry would be recorded by Avers with a debit to Notes payable with an amount of $10,000.

Interest amount = $10,000 × (60 ÷ 360) × 0.08

                           = $10,000 × 0.17 × 0.08

                           = $136

(Note: Assuming 360 days in a year)

Therefore, the Journal entry is as follows:

Notes payable A/c     Dr. $10,000

Interest Expense A/c Dr. $136

To cash                                             $10,136

(To record Avers pays the amount due in full)

4 0
4 years ago
According to federal regulations, the expedited review process may be used when the study procedures pose: a minor increase over
Novosadov [1.4K]
The answer is no more than minimal risk and the research activities fall within regulatory categories identified as eligible. In addition, an expedited review procedure contains a review of research connecting human subjects by the Institutional Review Board chairperson or by one or more experienced reviewers chosen by the chairperson from between members of the Institutional Review Board in agreement with the requirements set onwards in 45 CFR 46.110. The expedited review process is conducted at an Institutional Review Board expedited review session. The submission goes through by staff in discussion with the Chair as needed, to govern if an expedited review process may be directed. If the procedure encounters the regulatory standards for an expedited review, it will be sent to the expedited review conference.
4 0
3 years ago
Read 2 more answers
Coastal Bank uses activity-based costing to determine the cost of servicing customers. There are three activity pools: teller tr
rosijanka [135]

Answer:Allocated MOH= $16

Explanation:

Giving the following information:

teller transaction processing ($2.80 per teller transaction)

check processing ($0.25 per canceled check)

ATM transaction processing ($0.20 per ATM transaction).

<u>To allocate overhead, we need to use the following formula:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 2.8*4 + 0.25*12 + 0.2*9

Allocated MOH= $16

4 0
3 years ago
The banking crisis of 2008 is quite interesting to analyze. The factors that led to this near banking collapse are intriguing to
grin007 [14]

Answer:

huh

Explanation:

3 0
2 years ago
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