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The owners of Sheridan Electronics Store are contemplating selling the business. The cumulative earnings for the past 5 years totall $969000, including a gain on
The owners of Sheridan Electronics Store are contemplating selling the business. The cumulative earnings for the past 5 years totall $969000, including a gain on discontinued operations of $32600. The annual earnings based on an average rate of return on investment for this industry would have been $140600. If excess earnings are to be capitalized at 15%, then implied goodwill should be :-
-278,600
311,200
- 936,400 - 362,227
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