! Required information [The following information applies to the questions displayed below.] Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Attorney fees for articles of incorporation March 1-March 30 wages March 1-March 30 rent Stock issuance costs April 1-May 30 wages Note: Leave no answer blank. Enter zero if applicable. Date February 10 March 30 March 30 Start-up costs amortized Organizational expenditures amortized April 1 May 30 Amount $ 35,000 4,750 2,300 35,000 11,875 c. What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 [not including the amount determined in part (b)]? Note: Round intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.

! Required information [The following information applies to the questions displayed below.] Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Attorney fees for articles of incorporation March 1-March 30 wages March 1-March 30 rent Stock issuance costs April 1-May 30 wages Note: Leave no answer blank. Enter zero if applicable. Date February 10 March 30 March 30 Start-up costs amortized Organizational expenditures amortized April 1 May 30 Amount $ 35,000 4,750 2,300 35,000 11,875 c. What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 [not including the amount determined in part (b)]? Note: Round intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3 Net Income. A calendar year S corporation has the following information for the current taxable year: Sales $180,000 Cost of goods sold. Dividend income Net capital loss Salary to Z. Life insurance for Z (70,000) 5,000 (4,000) 12,000 500 Other operating expenses Cash distributions to owners 40,000 20,000 Assume Z is single and her only other income is $30,000 salary from an unrelated employer. She is a 20% owner with a $10,000 basis in the S stock at the beginning of the year. Calculate the S corporation's net ordinary income and Z's adjusted gross income and ending basis in the S corporation stock.
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deductible)? 73. Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Attorney fees for articles of incorporation February 10 March 1-March 30 wages March 30 March 1-March 30 rent March 30 Stock issuance costs April 1 April 1-May 30 wages May 30 Date Amount $32,000 4,500 2,000 20,000 12,000 a) What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation? b) What amount of the start-up costs and organizational expenditures may the corporation immediately expense in year 1 (excluding the portion of the expenditures that are amortized over 180 months)? c) What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 [not including the amount determined in part (b)]? d) What would be the total allowable organizational expenditures if Nicole…
Payable to Company Founder Jensen Inc. has a $500,000 note payable due to its founder, Jen Jensen. Ms. Jensenis recently deceased and has no heirs that Jensen Inc.’s executive team is aware of. The company has asked for yourhelp to determine whether it is appropriate to derecognize the liability from its financial statements.Required:1. Respond to Jensen Inc. Describe the applicable guidance requirements, including excerpts as needed to supportyour response.2. Next, explain how you located the relevant guidance, including the search method used and which section yousearched within the appropriate topic
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Required information Skip to question [The following information applies to the questions displayed below.] Indicate the amount (if any) that Josh can deduct as an ordinary and necessary business deduction in each of the following situations. Note: Leave no answers blank. Enter zero if applicable. a. Josh borrowed $74,000 from First State Bank using his business assets as collateral. He used the money to buy City of Blanksville bonds. Over the course of a year, Josh paid interest of $9,900 on the borrowed funds, but he received $9,000 of interest on the bonds. b. Josh purchased a piece of land for $91,000 in order to get a location to expand his business. He also paid $8,500 to construct a new driveway for access to the property c. This year Josh paid $24,600 to employ the mayor's son in the business. Josh would typically pay an employee with these responsibilities about $22,900, but the mayor assured Josh that after his son was hired, some city business would be coming his way. d.…
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Required information Skip to question [The following information applies to the questions displayed below.] Sandra would like to organize LAB (a legal corporation) as either an S corporation or a C corporation for tax purposes. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on qualified dividends and net capital gains is 20 percent. LAB's income is not qualified business income (QBI), so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its earnings after entity-level taxes every year. Ignore the additional Medicare tax and the net investment income tax when computing your answers. Note: Round your intermediate computations to the nearest whole dollar amount. b. What is the overall tax rate on LAB's income in the first year if LAB is organized as an S corporation or as a C corporation? Note: Round your…
Candlewood LLC started business on December 1, and it adopted a calendar tax year. During the year, Candlewood incurred $10,750 in legal fees for drafting the LLC's operating agreement and $5,375 in accounting fees for tax advice of an organizational nature, for a total of $16,125 of organizational costs. Candlewood also incurred $26,000 of preopening advertising expenses and $27,800 of salaries and training costs for new employees before opening for business, for a total of $53,800 of startup costs. The LLC wants to take the larges deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. How much can Candlewood deduct as organizational expenses? As startup expenses? The LLC may deduct $ X as organizational expenses and $ as startup expenses.