ABC LLC is a calendar year LLC that was organized on April 1, 2020, and started business on May 1, 2020. During 2020 ABC incurred $8,000 in legal fees for writing the agreement between the members of the LLC. ABC also incurred $4,400 in fees for consultation during the formation of the organization. In April 2020 ABC also incurred $40,000 of advertising expenses and $30,000 for salaries and training costs for a total of $70,000. Question: How much of the expenses incurred by ABC that it can deduct in 2020? Be sure to show your computation?

ABC LLC is a calendar year LLC that was organized on April 1, 2020, and started business on May 1, 2020. During 2020 ABC incurred $8,000 in legal fees for writing the agreement between the members of the LLC. ABC also incurred $4,400 in fees for consultation during the formation of the organization. In April 2020 ABC also incurred $40,000 of advertising expenses and $30,000 for salaries and training costs for a total of $70,000. Question: How much of the expenses incurred by ABC that it can deduct in 2020? Be sure to show your computation?

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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