Adequate information: Information generated from the Financial Statement extract for Company Quickbrush & SmileWhite is as below: Write off of Goodwill in 20 years by Quickbrush while 5 years by SmileWhite Quickbrush uses Straight line method of depreciation for buildings and period range from 5 years to 20 years while SmileWhite uses accelerated method for buildings and period range Quickbrush provides for 2% provision for bad debts while SmileWhite provides 5% To Compute: Compare the quality of earnings by discussing each of three above aspects.

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Chapter 19, Problem 1CP

Summary Introduction

Adequate information:

Information generated from the Financial Statement extract for Company Quickbrush & SmileWhite is as below:

Write off of Goodwill in 20 years by Quickbrush while 5 years by SmileWhite

Quickbrush uses Straight line method of depreciation for buildings and period range from 5 years to 20 years while SmileWhite uses accelerated method for buildings and period range

Quickbrush provides for 2% provision for bad debts while SmileWhite provides 5%

To Compute:

Compare the quality of earnings by discussing each of three above aspects.

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