Candlewood LLC began its business on May 1; it uses a calendar tax and an accounting year. Candlewood incurred $13,150 in legal fees for drafting the LLC's operating agreement and $6,575 in accounting fees for tax advice of an organizational nature, for a total of $19,725 of organizational costs. Candlewood also incurred $13,000 of preopening advertising expenses and $39,400 of salaries and training costs for new employees before opening for business, for a total of $52,400 of startup costs. The LLC desires to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. Compute Candlewood's deductions for the first year of its operations for: a. Organizational expenditures. b. Startup expenses.

Candlewood LLC began its business on May 1; it uses a calendar tax and an accounting year. Candlewood incurred $13,150 in legal fees for drafting the LLC's operating agreement and $6,575 in accounting fees for tax advice of an organizational nature, for a total of $19,725 of organizational costs. Candlewood also incurred $13,000 of preopening advertising expenses and $39,400 of salaries and training costs for new employees before opening for business, for a total of $52,400 of startup costs. The LLC desires to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. Compute Candlewood's deductions for the first year of its operations for: a. Organizational expenditures. b. Startup expenses.

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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