Viewing page 72 of 84

This transcription has been completed. Contact us with corrections.

138
capital was paid in.
Therefore this additional sum of money ought to be subtracted [[strikethrough]] from [[/strikethrough]] in case we use present assets as a basis for computing earnings in relation to investments. 
But I believe it would be much simpler to [[strikethrough]] follow [[/strikethrough]] ^[[apply]] the formula for good will as follows:
[[vertical red line in left margin highlights the formula]]
(P+D+T)-C
--------- x 100$ = Cs 
11x8x[[strikethrough]] [[100?]] [[/strikethrough]]
                         ^(88)
[[erased number under "Cs"]] (8800) [[/erased number]]
[[bracketed annotation to the right of "Cs"]] 
{Value Cs can be divided by 2 or 3 or 10 or any number agreed upon. 
[[/bracketed annotation]]
in which 
C = cash put in the company (in our case $360000)
P = Physical assets as appraised up to date by [[strikethrough]] P.A C.P [[/strikethrough]] Chartered Public accountant. This includes 
1/ real estate & buildings
[[/vertical red line in left margin]]
2/ machinery and general equipments
3/ supplies
4/ Raw materials
5/ Partly manufactured materials
6/ Manufactured materials ready
[[end page]]
[[start page]]
139
for delivery
7/ cash
8/ securities
9/ Bills and accounts receivable 
From this has to be deducted all debts, bills and accounts payable 
P does [[underline]] not [[/underline]] include any value for patents, trade marks, or good will nor any intangible assets.
D = Dividends paid to stock holders since the company was started until to date of [[strikethrough]] agreement [[/strikethrough]] computing physical assets.
T = Federal taxes paid to U.S. Government. In this ought to be examined any pending claims for or against the Government
The number [[underline]] 11 [[/underline]] represents common dividor of the 11 years of existence of the[[strikethrough]] older [[/strikethrough]] ^[[2 senior]] companies 
100 stands for $100 [[strikethrough]] calculating [[/strikethrough]] capitalizing good will at [[strikethrough]] 10% [[/strikethrough]] 8% and [[underline]] 8 [[/underline]] stands for the latter. We might use 10 as well