Question

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: (Leave no answer blank. Enter zero if applicable.)

Expense	Date	Amount
Attorney fees for articles of incorporation	February 10	$	42,000
March 1 – March 30 wages	March 30		7,000
March 1 – March 30 rent	March 30		3,000
Stock issuance costs	April 1		21,000
April 1 – May 30 wages	May 30		17,500

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)? (Round intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.)

start-up costs amortized
organizational expenditures amortized

Answer 1

Startup Cost:

Attorney Fees	42,000
March 1-March 30 Wages	7,000
March 1- March 30 Rent	3,000
Total Startup Cost	52,000

Organizational Expenditure Amortized

Stock Issuance Cost	21,000
April 1- May 30 Wages	17,500
Total	38,500