The information in the following table comes from the 2020 financial statements of QuickBrush Company and SmileWhite Corporation:

Determine which company has the higher quality of earnings by discussing each of the three notes.  

Transcribed Image Text:

Notes to the 2020 Financial Statements Goodwill Property. plant, and equipment Accounts receivable QuickBrush The company amortizes goodwill over 20 years. The company uses a straight-line depreciation method over the economic lives of the assets, which range. from 5 to 20 years for buildings. The company uses a bad- debt allowance of 2% of accounts receivable. SmileWhite The company amortizes goodwill over 5 years. The company uses an accelerated depreciation method over the economic lives of the assets, which range from 5 to 20 years for buildings. The company uses a bad- debt allowance of 5% of accounts receivable.