Goodwill and Intangibles Gannett Co. owns many media companies, including numerous small-town papers and the national newspaper, USA Today. In 2002, revenues totaled $6.4 billion with net income of $1,160 million, up from $831 million in the prior year. 1. Gannett's 2002 balance sheet showed goodwill of $8.8 billion out of total assets of $13.7 billion. Express goodwill as a percentage of total assets and indicate what that suggests about Gannett's growth. Did Gannett grow by starting new newspapers or by acquiring them? 2. During 2002, Gannett complied with new FASB rules and ended the amortization of goodwill, which had contributed to a $241 million charge for amortization of goodwill and other intangibles in 2001. In contrast, amortization of other intangibles was $7 million in 2002. Calculate the increase in net earnings from 2001 to 2002 as reported by Gannett. Compute the increase in net earnings if there had been no change in accounting rules and amortization of goodwill and other intangibles in 2002 was the same as in 2001. There was no goodwill impairment. Comment.