Costs of hiring new employees Attorney's fees in connection with the organization of the company Improvements to leased offices prior to occupancy (10-year lease) Costs of pre-opening advertising 3,000 12,000 6,000 5,000

Costs of hiring new employees Attorney's fees in connection with the organization of the company Improvements to leased offices prior to occupancy (10-year lease) Costs of pre-opening advertising 3,000 12,000 6,000 5,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 5C: Initial Direct Costs Efland Company leases equipment to Orange Company. Efland incurred the...

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Question

Kling Company was organized in late 2019 and began operations On January 2, 2020. Prior to the start of operations, it incurred the following costs:

1. what amount should the compmy expense in 2019? In 2020?
2. Next Level What is the justification of the accounting treatment of these costs?

Costs of hiring new employees
Attorney's fees in connection with the organization of the company
Improvements to leased offices prior to occupancy (10-year lease)
Costs of pre-opening advertising
3,000
12,000
6,000
5,000

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