P incurred incorporation costs of $12,000 to incorporate a new corporation, effective January 1 of the...
P incurred incorporation costs of $12,000 to incorporate a new
corporation, effective January 1 of the current year, and chose
December 31 as its first year end. What is the maximum amount that
can be deducted in computing income for the current year?
Homework Answers
Ans:
The incorporation expenses is less than $50000, so initial top up deduction is $5000. The rest of the incorporation costs are absorbed and amortised in 180 months equal installment starting from the day one of incorporation. So, monthly amortisation amount is $7000/180=$38.89.
The first/current year (complete 12 months) maximum amount of incorporation costs deduction is = $5000 + ($38.89* 12) = $5466.68 or $5467.
Add Answer to:
P incurred incorporation costs of $12,000 to incorporate a new
corporation, effective January 1 of the...
P incurred incorporation costs of $10,000 to incorporate a new corporation, effective January 1 of the...
P incurred incorporation costs of $10,000 to incorporate a new corporation, effective January 1 of the current year, and chose December 31 as its first year end. What is the maximum amount that can be deducted in computing income for the current year? Note: Do not place a minus sign in front of the amount. $
17. in organizing its incorporation in January, chupatch incurred the following costs: state incorporation fees $250,...
17. in organizing its incorporation in January, chupatch incurred the following costs: state incorporation fees $250, attorney fees: $2500 and promotional cost $3200. what journal entry would you make to record these expenses? 18. in their partnership agreement,Jane, Jill and Bridget have an income/loss distribution ratio of 5:3:2. how much would each of the three partners receive from an income of $120,000? Jane will get $ : Jill will get $ : and Bridget will receive :
1. Brinkley Company has the following information available: Raw Materials, January 1 balance $ 12,000 Selling...
1. Brinkley Company has the following information available: Raw Materials, January 1 balance $ 12,000 Selling & Admin Cost (entire year) 75,000 Factory Utilities (entire year) 12,000 WIP, January 1, balance 21,000 Factory Supervisory Salaries (entire year) 35,000 Direct Labor (entire Year) 48,000 Factory Indirect Materials 11,000 Finished Goods, January 1 balance 16,000 Raw Materials, December 31 balance 38,000 Factory Depreciation (entire year) 13,000 Purchase of Raw Materials (entire year) 70,000 WIP, December 31, balance 25,000 Factory Indirect Labor (entire...
Petrel Corporation has accumulated E & P of $85,000 at the beginning of the year. Its...
Petrel Corporation has accumulated E & P of $85,000 at the beginning of the year. Its current-year taxable income is $320,000. On December 31, Petrel distributed business property (land: fair market value of $140,000, adjusted basis of $290,000) to Juan, its sole shareholder. Juan assumes a $70,000 liability on the property. Included in the determination of Petrel's current taxable income is $16,000 of income recognized from an installment sale in a previous year. In addition, the corporation incurred a Federal...
Managerial Accounting E15-8 Lopez Corporation incurred the following costs while manufacturing its product. Materials used in...
Managerial Accounting
E15-8 Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line Sales commissions 35,000 workers 110,000 Salaries paid to sales Factory supplies used 23,000 clerks 50,000 Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and...
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $1 par...
Incentive Corporation was authorized to issue 12,000 shares of
common stock, each with a $1 par value. During its first year, the
following selected transactions were completed:
a.
Issued 6,800 shares of common
stock for cash at $28 per share.
b.
Issued 2,800 shares of common
stock for cash at $31 per share.
E11-2 Part 1 Required: 1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account...
The balance of the Estimated Warranty Liability account was $12,000 on January 1, 2018, and $13,600...
The balance of the Estimated Warranty Liability account was $12,000 on January 1, 2018, and $13,600 on December 31, 2018. Based on an analysis of warranty claims during the past several years, this year's warranty expense was established at 3% of sales, and sales during the year were $800,000. Required: a. What amount of warranty expense will appear on the income statement for the year ended December 31, 2018? b. What were the actual costs of servicing products under warranty...
On January 1, 2015, Swift Corporation, a small manufacturer of machine tools, acquired new indust...
On January 1, 2015, Swift Corporation, a small manufacturer of
machine tools, acquired new industrial equipment for $1,320,000.
The new equipment had a useful life of five years and the residual
value was estimated to be $60,000. Swift estimates that the new
equipment can produce 14,500 machine tools in its first year. It
estimates that production will decline by 1,000 units per year over
the equipment’s remaining useful life.
The following depreciation methods may be used: (1) straight-line,
(2) double-declining-balance,...
On January 1, 2020, Wildhorse Corporation issued 11% bonds with a par value of $5,170,000, due...
On January 1, 2020, Wildhorse Corporation issued 11% bonds with
a par value of $5,170,000, due in 10 years. The company incurred
$195,000 in costs associated with the issuance of the bonds, which
were capitalized. The bonds were issued at 102, and paid interest
on January 1 and July 1 each year. Wildhorse’s year-end was March
31. The company followed ASPE and chose to use the straight-line
method of amortization for bond discounts or premiums.
Current Attempt in Progress On...
On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016
On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 7%. Bond issue costs associated with the bonds totaled 522,107.40. Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 7% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs using the straight-line method December 31,...
1. Brinkley Company has the following information available: Raw Materials, January 1 balance $ 12,000 Selling & Admin Cost (entire year) 75,000 Factory Utilities (entire year) 12,000 WIP, January 1, balance 21,000 Factory Supervisory Salaries (entire year) 35,000 Direct Labor (entire Year) 48,000 Factory Indirect Materials 11,000 Finished Goods, January 1 balance 16,000 Raw Materials, December 31 balance 38,000 Factory Depreciation (entire year) 13,000 Purchase of Raw Materials (entire year) 70,000 WIP, December 31, balance 25,000 Factory Indirect Labor (entire...
Managerial Accounting
E15-8 Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line Sales commissions 35,000 workers 110,000 Salaries paid to sales Factory supplies used 23,000 clerks 50,000 Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and...
Incentive Corporation was authorized to issue 12,000 shares of
common stock, each with a $1 par value. During its first year, the
following selected transactions were completed:
a.
Issued 6,800 shares of common
stock for cash at $28 per share.
b.
Issued 2,800 shares of common
stock for cash at $31 per share.
E11-2 Part 1 Required: 1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account...
On January 1, 2015, Swift Corporation, a small manufacturer of
machine tools, acquired new industrial equipment for $1,320,000.
The new equipment had a useful life of five years and the residual
value was estimated to be $60,000. Swift estimates that the new
equipment can produce 14,500 machine tools in its first year. It
estimates that production will decline by 1,000 units per year over
the equipment’s remaining useful life.
The following depreciation methods may be used: (1) straight-line,
(2) double-declining-balance,...
On January 1, 2020, Wildhorse Corporation issued 11% bonds with
a par value of $5,170,000, due in 10 years. The company incurred
$195,000 in costs associated with the issuance of the bonds, which
were capitalized. The bonds were issued at 102, and paid interest
on January 1 and July 1 each year. Wildhorse’s year-end was March
31. The company followed ASPE and chose to use the straight-line
method of amortization for bond discounts or premiums.
Current Attempt in Progress On...
Most questions answered within 3 hours.
-
You have been asked to develop a new line of organic skincare
products. Spend time with...
asked 6 minutes ago -
Summerdahl Resort's common stock is currently trading at $37 a
share. The stock is expected to...
asked 26 minutes ago -
To an economist, the field of industrial organization answers
which of the following questions?
asked 30 minutes ago -
How could meeting industry expectations, propel managers into
challenging and possible conflict of interest situations? How...
asked 54 minutes ago -
You have been married to your spouse for 10 years. You have two
small children (ages...
asked 2 hours ago -
Spiderman makes a leap from one building to
another. He starts on one building that is...
asked 2 hours ago -
A
symbol is something that stands for something else. What are the
symbols in education?what are...
asked 3 hours ago -
The charge to the left in the figure above has a
magnitude of 2.90 nC, and...
asked 4 hours ago -
Verify the MIRR is 9.29% given cash flows in years 1 and 2 of
$1,000 each,...
asked 5 hours ago -
Calculate the pH of a 5.7 M solution of aniline (C6H5NH2; Kb =
3.8 x 10^-10)
asked 7 hours ago -
LSL R3, R3, R12
Memory
Address
Orig.
Data
Updated
Data
Register
Orig.
Data
Updated
Data
0x84F0...
asked 7 hours ago -
Air at 100 kPa and density of 1.2 kg/m3 flows upward through a
5-cm diameter inclined...
asked 7 hours ago