Perry Develops a Successful Advertising Business That He Subsequently Sells

question 104

Essay

Perry develops a successful advertising business that he subsequently sells to his competitor,Carl,for $108,000.He retires in the same town where he has always lived and done business.Carl insists that Perry sign a covenant not to compete.The advertising business has no tangible assets;Carl receives only the name of the business,the client lists and whatever going-concern value there is.How should Carl treat the $108,000 cost of the advertising business he purchased?

---

Definitions:

Collective Agreements

Contracts made between employers and a group of employees, often represented by a union, that establish terms of employment, working conditions, and wages.

Collective Bargaining

A negotiation process between employers and a group of employees aimed at establishing agreements regarding wages, working conditions, and other employment terms.

External Factor

Influences, trends, or variables originating outside of an organization that can affect its performance and decision-making.

Employer's Ability

An organization's capacity to meet its obligations, including paying salaries, providing benefits, and maintaining a safe work environment.