Final answer:
If a company properly reports goodwill as an intangible asset on its books, it means that the company purchased another company and recorded the excess purchase price as goodwill. However, the presence of goodwill alone does not guarantee the company's value or positive future business. Having a well-established brand name is a contributing factor to goodwill, but not the only one.
Step-by-step explanation:
If a company properly reports goodwill as an intangible asset on its books, it means that the company has recognized the value of intangible assets like brand reputation, customer loyalty, and intellectual property rights. Goodwill is typically recorded when a company acquires another company and the purchase price exceeds the net asset value of the acquired company. Therefore, option (c) 'The company purchased another company' must be true if goodwill is properly reported as an intangible asset.
However, the presence of goodwill alone does not guarantee that the company is valuable or worth investing in (option a). Goodwill is subjective and its value can change over time. It is a result of past investments and may not necessarily generate positive business in the future (option d). Finally, while having a well-established brand name (option b) can contribute to goodwill, it is not the only factor that determines the recognition of goodwill on a company's books.