Candlewood LLC started business on July 1, and it adopted a calendar tax year. During the year, Candlewood incurred $7,600 in legal fees for drafting the LLC's operating agreement and $3,800 in accounting fees for tax advice of an organizational nature, for a total of $11,400 of organizational costs. Candlewood also incurred $22,000 of preopening advertising expenses and $31,000 of salaries and training costs for new employees before opening for business, for a total of $53,000 of startup costs. The LLC wants 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. How much can Candlewood deduct as organizational expenses? As startup expenses? The LLC may deduct $ 5,192 X as organizational expenses and $ 3,530 X as startup expenses.

Candlewood LLC started business on July 1, and it adopted a calendar tax year. During the year, Candlewood incurred $7,600 in legal fees for drafting the LLC's operating agreement and $3,800 in accounting fees for tax advice of an organizational nature, for a total of $11,400 of organizational costs. Candlewood also incurred $22,000 of preopening advertising expenses and $31,000 of salaries and training costs for new employees before opening for business, for a total of $53,000 of startup costs. The LLC wants 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. How much can Candlewood deduct as organizational expenses? As startup expenses? The LLC may deduct $ 5,192 X as organizational expenses and $ 3,530 X as 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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