FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Refer to the Chapter 5 “Start-up Costs” discussion starting on page 5-19, and read the accompanying Examples 27, 28, and 29 very carefully.

 

Dilly’s dream was to open a cookie shop, so she did her homework carefully be-fore finally opening “Dilly’s Delights” on July 1, 2019. Before that date, she had incurred the following “soft costs” –

 

  • $12,000 realtor’s fee for finding a storefront to rent,
  • $16,000 attorneys’ fees for negotiating a lease and trademark services,
  • $8,000 wage expense for employees during the pre-opening period, and
  • $18,000 for pre-opening TV and other advertising.

 

Calculate and state the exact amount that you, in preparing Dilly’s 2019 return, will enter as her 2019 start-up costs deduction.

 

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