Needles Company Purchased Boston Company on August 31, 2010

question 70

Multiple Choice

Needles Company purchased Boston Company on August 31, 2010. Needles recorded goodwill in the purchase of Boston and has determined that the Boston goodwill will have an indefinite life. How will Needles account for the Boston goodwill in future accounting periods?

• A)Needles will amortize the Boston goodwill over a 50-year life.
• B)If the value of the Boston goodwill increases in subsequent years, Needles will increase the value in the Boston Goodwill account.
• C)If the value of the Boston goodwill decreases in subsequent years, Needles will decrease the value in the Boston Goodwill account.
• D)Needles is not allowed to change the value of the Boston Goodwill account regardless of any future increase or decrease in the value of Boston goodwill.

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