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.

Recognize the implications of bailment contracts, including the impact of exemption clauses.

Assess the liability in cases of damage or loss of bailed goods.

Evaluate the legal protections for goods under bailment agreements.

Differentiate between bailment and other legal concepts such as licences and pledges.

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Definitions:

Agreement to Sell

An agreement to sell indicates a mutual understanding or contract between parties to transfer property or goods from seller to buyer in the future.

Expiry Dates

Specified dates after which a product is no longer considered safe or effective to use, or a period is considered to have ended.

Gift Cards

Prepaid stored-value money cards issued by retailers or banks to be used as an alternative to cash for purchases within a particular store or related businesses.

Abusive Debt Collectors

Individuals or agencies that use unethical or illegal practices to collect debts, often violating debtors' rights.