According to generally accepted accounting principles, goodwill is recorded as an asset
a. when favorable factors combine to create goodwill.
b. when a company has superior earning power.
c. when it is paid for as part of the purchase of a business.
d. under no circumstances.
C
You might also like to view...
The relationship between a principal and an independent contractor always involves an agency relationship
a. True b. False Indicate whether the statement is true or false
A dividend reinvestment plan enables stockholders to ________.
A) reinvest the dividends in money market instruments which are risk free B) reinvest all dividends in the firm with no accompanying increase in equity C) acquire additional dividends through redemption of stock D) acquire shares at little or no transaction costs
In the year 2010, total government receipts net of transfers in the United States accounted for approximately what share of GDP?
a. 10% b. 25% c. 35% d. 55%
Gull Corporation was undergoing reorganization under the bankruptcy laws. The shareholders, who had made loans of $300,000 to the corporation, agreed to accept additional stock with a value of $200,000 instead of repayment on the debt. The Old Line
Insurance Company, which had a $400,000 mortgage on the building, agreed to reduce the principal to $250,000 . A trade creditor with a receivable of $150,000 from the company agreed to accept $70,000 in full payment for the debt incurred to purchase goods that were still on hand. Finally, the company transferred some equipment with an adjusted basis of $90,000 in satisfaction of a liability for $120,000 . Compute the corporation's gross income and other adjustments necessary as a result of the above transactions.