In organizing its incorporation in January, Chupatch incurred the following costs: state incorporation fees: $250, attorney fees: $2,500, and promotional costs: $3,200. What journal entry would you make to record Chupatch's expenses? Make it below: Date Account Debit Credit
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- You are an accountant working for a company that has recently decided to incorporate. The company has incurred $4,300 for attorneys fees, promotion costs, and filing fees with the state of incorporation as a part of organizing the corporate entity. What is the journal entry to record these costs on March 13, assuming they are paid in cash?In May, Parr and Presba, while in the course of negotiations with Barker (a salesperson for Quaker Hill) to purchase plants and flowers, undertook to organize a corporation to be named the Denver Memorial Nursery, Inc. On May 14 and 16, Parr signed two orders on behalf of Denver Memorial Nursery, Inc., which, to the knowledge of Quaker Hill, was not yet formed, that fact being noted in the contract. A down payment in the amount of $1,000 was made. The corporation was not formed prior to entering into the contract because Quaker Hill insisted that the deal be concluded at once since the growing season was rapidly passing. Under the contract, the balance of the purchase price was not due until the end of the year. The plants and flowers were shipped immediately and arrived on May 26. The Denver Memorial Nursery, Inc., was never formed. Quaker Hill seeks to recover the unpaid balance of the purchase price from Parr and Presba. a. What are the arguments that Parr and Presba are personally…Freitas Corporation was organized early in 2024. The following expenditures were made during the first few months of the year: Attorneys’ fees in connection with the organization of the corporation $ 12,200 State filing fees and other incorporation costs 3,200 Purchase of a patent 20,100 Legal and other fees for transfer of the patent 2,200 Purchase of equipment 30,100 Preopening salaries and employee training 40,100 Total $ 107,900 Required: Prepare a summary journal entry to record the $107,900 in cash expenditures. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
- Beech Corporation, an accrual-basis, calendar-year taxpayer, was organized and began business in June of the current calendar tax year. During the current year, the corporation incurred the following expenses: State feeds for incorporation $775 legal and accounting fees incedent to organization 2,713 Expenses for the sale of stock 3,100 Organizational meeting expenses 3,294 Assuming that Beech Corporation wishes to deduct organizational expenses as quickly as possible, calculate the corporation’s deduction for its current calendar tax year.Which of the following entities is required to report on the accrual basis? An accounting firm operating as a Personal Service Corporation. A manufacturing business with $30 million of gross receipts operating as a regular C corporation. A corporation engaged in tropical fruit farming in Southern California. A partnership with gross receipts of $13 million and all of the partners are individuals with a December year-end.Ion Corporation, a calendar year C corporation, was formed on September 1, 2020, and opened for business on October 1, 2020. After its formation but prior to opening for business, Ion incurred the following expenditures. Accounting $10,500 Advertising 20,700 Employee payroll 12,800 Rent 4,000 Utilities 2,200 Round the per-month amount to two decimal places and use the rounded amount in subsequent computations. Round the final answer to the nearest dollar. Assuming the company makes the § 195 election, the maximum amount of these expenditures that Ion can deduct in 2020 is
- For five years, Henry and James had been engaged as partners in building houses. They owned the equipment necessary to conduct the business and had an excellent reputation. In March, Joyce, who had previously been in the same kind of business, proposed that Henry, James, and Joyce form a corporation for the purpose of constructing medium-priced houses. They engaged attorney Portia, who did all the work required to incorporate the business under the name of Libra Corp. The certificate of incorporation authorized one thousand shares of $100 par value stock. At the organizational meeting of the incorporators, Henry, James, and Joyce were elected directors, and Libra Corp. issued a total of six hundred fifty shares for its stock. Henry and James each received two hundred shares in consideration of transferring to Libra Corp. the equipment and goodwill of their partnership, which had a combined value of more than $40,000. Joyce received two hundred shares in consideration for promising to…Beech Corporation, an accrual basis calendar year taxpayer, was organized and began business on July 1st of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation $ 2,545 Legal and accounting fees incident to organization 8,908 Expenses for the sale of stock 10,180 Organizational meeting expenses 3,818 Assuming that Beech Corporation does not elect to expense but chooses to amortize organizational expenditures over 15 years, calculate the corporation's deduction for its current calendar tax year. Round per month calculation to two decimal places. Round your final answer to the nearest dollar.Candlewood LLC started business on September 1, 2020 and adopted a calendar year. During 2021, Candlewood incurred $6,500 in legal fees for drafting the LLC's operating agreement and $3,000 in accounting fees for tax advice of an organizational nature, for a total of $9,500 of organizational costs. Candlewood also incurred $30,000 of preopening advertising expenses and $24,500 of salaries and training costs for new employees before opening for business, for a total of $54,500 of startup costs. The LLC wants to take the largest deduction available for these costs. If required, round any division to five decimal places and use in subsequent computations. Round your final answers to the nearest dollar. In 2020, the LLC may deduct $fill in the blank 1 as organizational expenses and $fill in the blank 2 as startup expenses.
- Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record: 1. The monthly property tax adjustments from July Year 2 to October Year 2 2. The payment on November 30, Year 2 (before the…Gull Corporation, a cash method, calendar year C corporation, was formed and began business on November 1, 2020. Gull incurred the following expenses during its first year of operations (November 1, 2020–December 31, 2020): Expenses of temporary directors and organizational meetings $21,000 Fee paid to state of incorporation 3,000 Expenses for printing and sale of stock certificates 11,000 Legal services for drafting the corporate charter and bylaws (not paid until January 2021) 19,000 Assuming that Gull Corporation elects under § 248 to expense and amortize organizational expenditures, what amount may be deducted in 2020? Assume the same facts as above, except that the amount paid for the legal services was $28,000 (instead of $19,000). What amount may be deducted as organizational expenditures in 2020?