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3 years ago

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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What is the difference between a public and a private corporation?

viva [34]

The principal difference between public and privately held companies is that public companies have shares that can be publicly traded on a stock market. A privately held company might become a publicly held company by conducting an initial public offering, which is the offering of shares of the company to the public.

6 0

3 years ago

Charles Berkeley, Inc. just paid an annual dividend of $3.60 per share on its stock. The dividends are expected to grow at a con

8_murik_8 [283]

Answer:

D. $98.15

Explanation:

Price of stock formula;

Price today(P0) = $\frac{D0(1+g)}{r-g}$

D0= Current dividend

g = growth rate

r = required return

Price = $\frac{3.60(1.045)}{0.11 -0.045}$

= 3.762 /0.065

Price = 57.877

Price in 12 years (P12) = P0(1+g)

P12 = 57.877 * $1.045^{12}$

P12 =$98.152

Therefore, price of stock in 12 years will be $98.15

5 0

3 years ago

Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.6 liters per unit

frosja888 [35]

Answer:

Direct material quantity variance= $1,260 unfavorable

Explanation:

Giving the following information:

Standard quantity of 7.6 liters per unit

Standard price $ 2.10 per liter

The company budgeted for production of 3,400 units.

The actual production was 3,500 units.

The company used 27,200 liters of direct material to produce this output.

To calculate the direct material quantity variance, we need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 3,500 units* 7.6= 26,600

Direct material quantity variance= (26,600 - 27,200)*2.1= $1,260 unfavorable

<u>It is unfavorable because the company used more material than estimated to produce 3,500 units.</u>

6 0

3 years ago

Should all companies use blind recruiting in place of traditional recruiting, or are there exceptions that must be considered?

Leto [7]

Answer:

There are advantages and disadvantages to both recruitment methods. Traditional recruitment is still the most common method of recruitment used in the world, due to its simplicity and greater speed in attracting candidates through advertisements, references and internal hiring, for example, which consequently speeds up the selection process, but this type of recruitment can lead to biased evaluations of candidates and not hiring employees based on some kind of prejudice.

In blind recruitment, however, it is not possible to identify details of curriculum and candidates, the selection is made through factors such as experience and skills of the candidate, which eliminates associated prejudices such as age, gender and ethnicity. But the disadvantage of blind recruitment is that it can reduce organizational diversity and miss details that align the candidate's values to organizational culture.

Therefore, it is necessary for each company to analyze which recruitment methods will be more advantageous according to the position, with traditional recruitment being more relevant for hiring professionals for higher hierarchical positions, where there is a need for a more in-depth analysis.

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2 years ago

Sophia's family is growing, and she needs to buy a bigger car by financing it for five years. Why is it important for her to che

GalinKa [24]

Answer:

To verify the accuracy of his rental history

Explanation:

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He has to verify his rental history so as to know if there's a mistake or if the details written are not correct. To apply for the mortgage, he needs to ensure that the details are correct.

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3 years ago