Homework Answers
The correct answer is
May be deducted only in the year in which these costs are paid
Explanation: Organization cost like legal fees, fees paid to the state of incorporation, fees paid to promoters, ciata of meetings for organizing the promoters are expensed as incurred for GAAP and financial reporting purposes
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The costs of organizing a corporation in 2020 O May be deducted only in the year...
Problem 11-6 Special Deductions and Umitations (LO 11.3) Beech Corporation, an accrual basis calendar year taxpayer...
Problem 11-6 Special Deductions and Umitations (LO 11.3) Beech Corporation, an accrual basis calendar year taxpayer, was organized and began business on August 1st of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation Legal and accounting fees incident to organization Expenses for the sale of stock Organizational meeting expenses $ 500 4,150 2,100 Assuming that Beech Corporation does not elect to expense but chooses to amortize organizational expenditures over...
Situation I On January 1, 2020, Kingbird, Inc. signed a fixed-price contract to have Builder Associates...
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Situation On January 1, 2020, Crane, Inc. signed a fixed-price contract to have Builder Associates construct...
Situation On January 1, 2020, Crane, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,160,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2020, to finance the construction cost, Crane borrowed $4,160,000 payable in 10 annual installments of $416,000, plus interest at the rate of 10%. During 2020, Crane made deposit and progress payments totaling $1,560,000 under the contract; the weighted...
Presented below are selected transactions on the books of Culver Corporation. May 1, 2020 Bonds payable...
Presented below are selected transactions on the books of Culver Corporation. May 1, 2020 Bonds payable with a par value of $861,600, which are dated January 1, 2020, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 11% (payable annually at January 1), and mature January 1, 2030. (Use interest expense account for accrued interest.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper...
EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial...
EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial statements prepared in accordance with GAAP. The corporation’s financial records reveal the following information: EFG earned $10,700 on an investment in tax-exempt municipal bonds. EFG’s allowance for bad debts as of January 1 was $21,000. Write-offs for the year totaled $4,400, while the addition to the allowance was $3,700. The allowance as of December 31 was $20,300. On August 7, EFG paid a $6,000...
Presented below are selected transactions on the books of Sheffield Corporation. May 1, 2020 Bonds payable...
Presented below are selected transactions on the books of Sheffield Corporation. May 1, 2020 Bonds payable with a par value of $824,400, which are dated January 1, 2020, are sold at 107 plus accrued interest. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2030. (Use interest expense account for accrued interest.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper...
Juliette formed a new business to sell sporting goods this year. The business opened its doors...
Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not including the portion of the expenditures that are amortized over 180 months) this year in the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) a. She incurred start-up costs of $3,900. Amount of start-up costs immediately expensed b. She incurred start-up costs of $44,500. Amount...
Problem 3-54 (LO. 5) Emerald Corporation, a calendar year and accrual method taxpayer, provides the following...
Problem 3-54 (LO. 5) Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks you to prepare Schedule M-1 for 2020: Net income per books (after-tax) $268,200 Federal income tax per books 31,500 Tax-exempt interest income 15,000 Life insurance proceeds received as a result of death of corporate president 150,000 Interest on loan to purchase tax-exempt bonds 1,500 Excess of capital losses over capital gains 6,000 Premiums paid on life insurance policy on life of...
On January 1, 2020, Marin Corporation purchased for $720,000 a tract of land (site number 101)...
On January 1, 2020, Marin Corporation purchased for $720,000 a tract of land (site number 101) with a building. Marin paid a real estate broker's commission of $51,840, legal fees of $8,640, and title guarantee insurance of $25,920. The closing statement indicated that the land value was $720,000 and the building value was $144,000. Shortly after acquisition, the building was razed at a cost of $77,760. Marin entered into a $4,320,000 fixed-price contract with Slatkin Builders, Inc. on March 1,...
Presented below are selected transactions on the books of Whispering Corporation. May 1, 2020 Bonds payable...
Presented below are selected transactions on the books of
Whispering Corporation.
May 1, 2020
Bonds payable with a par value of $937,200, which are dated
January 1, 2020, are sold at 105 plus accrued interest. They are
coupon bonds, bear interest at 12% (payable annually at January 1),
and mature January 1, 2030. (Use interest expense account for
accrued interest.)
Dec. 31
Adjusting entries are made to record the accrued interest on
the bonds, and the amortization of the proper...
Problem 11-6 Special Deductions and Umitations (LO 11.3) Beech Corporation, an accrual basis calendar year taxpayer, was organized and began business on August 1st of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation Legal and accounting fees incident to organization Expenses for the sale of stock Organizational meeting expenses $ 500 4,150 2,100 Assuming that Beech Corporation does not elect to expense but chooses to amortize organizational expenditures over...
Situation On January 1, 2020, Crane, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,160,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2020, to finance the construction cost, Crane borrowed $4,160,000 payable in 10 annual installments of $416,000, plus interest at the rate of 10%. During 2020, Crane made deposit and progress payments totaling $1,560,000 under the contract; the weighted...
Presented below are selected transactions on the books of Sheffield Corporation. May 1, 2020 Bonds payable with a par value of $824,400, which are dated January 1, 2020, are sold at 107 plus accrued interest. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2030. (Use interest expense account for accrued interest.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper...
Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not including the portion of the expenditures that are amortized over 180 months) this year in the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) a. She incurred start-up costs of $3,900. Amount of start-up costs immediately expensed b. She incurred start-up costs of $44,500. Amount...
Problem 3-54 (LO. 5) Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks you to prepare Schedule M-1 for 2020: Net income per books (after-tax) $268,200 Federal income tax per books 31,500 Tax-exempt interest income 15,000 Life insurance proceeds received as a result of death of corporate president 150,000 Interest on loan to purchase tax-exempt bonds 1,500 Excess of capital losses over capital gains 6,000 Premiums paid on life insurance policy on life of...
On January 1, 2020, Marin Corporation purchased for $720,000 a tract of land (site number 101) with a building. Marin paid a real estate broker's commission of $51,840, legal fees of $8,640, and title guarantee insurance of $25,920. The closing statement indicated that the land value was $720,000 and the building value was $144,000. Shortly after acquisition, the building was razed at a cost of $77,760. Marin entered into a $4,320,000 fixed-price contract with Slatkin Builders, Inc. on March 1,...
Presented below are selected transactions on the books of
Whispering Corporation.
May 1, 2020
Bonds payable with a par value of $937,200, which are dated
January 1, 2020, are sold at 105 plus accrued interest. They are
coupon bonds, bear interest at 12% (payable annually at January 1),
and mature January 1, 2030. (Use interest expense account for
accrued interest.)
Dec. 31
Adjusting entries are made to record the accrued interest on
the bonds, and the amortization of the proper...
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